Shanxi magnesium producers raise offers

BEIJING (Asian Metal) 4 Apr 07 – Facing the tightening supply of coal caused by the mine accident happened in Linfen, Shanxi in late March, more Shanxi-based magnesium producers begin raising offers this week. Many of them believe that suppliers in other regions of China will soon follow suit.

A Wenxi-based magnesium smelter, who claimed to have just sold a batch of 99.95%min magnesium ingot to a Chinese consumer at around RMB16,500/t (USD2,132/t) ex works, reported that many smelters in the region raised offers by around RMB200/t during the past couple of days due to the mine accident.

“What troubles us is the coal supply rather than sales,” said the source.

Fully running at the capacity of 10,000tpy, the smelter is trying the best to get hold of more coal. “We’re not clear that whether all the mines in Linfen will be forced to shut down for the environmental checkup or not, what seems so sure is that the coal supply is getting tighter and the price is increasing,” said the source.Asian Metal Copyright “What troubles us is the coal supply rather than sales,” said the source.Asian Metal Copyright Current coal stock of the smelter can only satisfy its production for less than 10 days.Asian Metal Copyright Current coal stock of the smelter can only satisfy its production for less than 10 days.Asian Metal Copyright Unable to obtain coal from the local mines, the smelter has to purchase from other regions of Shanxi or other provinces such as Henan and Shaanxi.

Another producer from Yuncheng, who usually purchases coal from Linfen confirmed that magnesium smelters in the region are busy searching for more coal in order to maintain normal production.

“We increased our quotation for 99.9%min magnesium ingot to RMB16,000/t (USD2,067/t) ex works against RMB15,800/t (USD2,041/t) ex works seen last week,” said the source.Asian Metal Copyright9%min magnesium ingot to RMB16,000t USD2,067t ex works against RMB15,800t USD2,041t ex works seen last week,” said the source.Asian Metal Copyright However, the source acknowledged that the market is not so active as many consumers are not aware what is happening.

Meanwhile, a consumer from North China considered that the tight supply of coal is only an excuse for magnesium suppliers to lift quotations. “Not all producers purchase coal from Linfen, producers can also acquire coal from Hejin or other regions,” said the source.

The source revealed that most recent offer received is around RMB16,000-16,100/t (USD2,067-2,080/t) ex works, around RMB200/t (USD26/t) higher than that of early last week.