Chinese magnesia producers have little incentive to produce
2024-03-26 08:28:29 [Print]
BEIJING (Asian Metal) 26 Mar 24 - Owing to the weak market demand, most producers have slow sales this month. Besides, the increased magnesite prices brings producers extreme thin profit, part of the producers chose to keep low operation rate or directly halt production this month. The current mainstream prices of Chinese caustic calcined magnesia 90%min 200mesh stand at RMB900-930/t (USD125-130/t) EXW D/A 180 days, unchanged from last week. Considering the increased production cost but weak demand, insiders predict that the mainstream prices of Chinese caustic calcined magnesia would remain unchanged by the end of this month.
"We halted production two weeks ago as we can not earn any profit from caustic calcined magnesia. The prices of magnesite increased by about RMB30/t (USD4.80/t) in the past month and still expect to increase further in the coming month, while we could not raise the price by even RMB5/t (USD0.70/t) as almost all of our regular clients refuse any prices higher than RMB900/t (USD125/t)," a producer in Liaoning complained, adding that they kept their offer for caustic calcined magnesia 90%min 200mesh firm at RMB920/t (USD128/t) EXW D/A 180 days and refused to sell at any price lower than RMB900/t (USD125/t). They closed no deal so far this week and has no clear plan to resume production at present. Considering the weak market demand, the producer believes that the mainstream prices of Chinese caustic calcined magnesia could only keep stable by the end of this month.
With a production capacity of 200,000tpy, they produced about 40,000t in 2023 and around 11,500t so far in 2024. They already produced about 1,500t in March, compared to about 5,000t in February. Now they hold around 2,000t in stock, down by about 1,000t from late last month.
"We sell caustic calcined magnesia 90%min 200mesh at RMB900/t (USD125/t) EXW D/A 180 days only to our regular clients now and refuse any orders from new buyers, as we have no profit at the current price but failed to lift the price even by RMB10/t (USD1.40/t)," another producer in Liaoning disclosed, adding that they expect to produce about 300t this month, unchanged since last December, reduced by 90% from normal months in 2023. He noted that the magnesite prices already increased over RMB30/t (USD4.80/t) in the past month and expect to move up further as magnesite suppliers now hold back from selling due to the magnesite mining restriction policy. However, they can not make any profit at the current price, so they would not increase production until the prices start to rise. They closed a deal of about 600t at RMB900/t (USD125/t) with a regular client two weeks ago. Considering the weak demand and firm refusals from buyers to higher prices, they believe that the mainstream prices of Chinese caustic calcined magnesia would remain unchanged in the coming week.
Based on a production capacity of 300,000tpy, they produced about 35,000t in 2023 and only about 900t so far this year. They produced about 300t in March, unchanged from February. Now they hold no inventory, down by about 300t from late last month.
"We halted production two weeks ago as we can not earn any profit from caustic calcined magnesia. The prices of magnesite increased by about RMB30/t (USD4.80/t) in the past month and still expect to increase further in the coming month, while we could not raise the price by even RMB5/t (USD0.70/t) as almost all of our regular clients refuse any prices higher than RMB900/t (USD125/t)," a producer in Liaoning complained, adding that they kept their offer for caustic calcined magnesia 90%min 200mesh firm at RMB920/t (USD128/t) EXW D/A 180 days and refused to sell at any price lower than RMB900/t (USD125/t). They closed no deal so far this week and has no clear plan to resume production at present. Considering the weak market demand, the producer believes that the mainstream prices of Chinese caustic calcined magnesia could only keep stable by the end of this month.
With a production capacity of 200,000tpy, they produced about 40,000t in 2023 and around 11,500t so far in 2024. They already produced about 1,500t in March, compared to about 5,000t in February. Now they hold around 2,000t in stock, down by about 1,000t from late last month.
"We sell caustic calcined magnesia 90%min 200mesh at RMB900/t (USD125/t) EXW D/A 180 days only to our regular clients now and refuse any orders from new buyers, as we have no profit at the current price but failed to lift the price even by RMB10/t (USD1.40/t)," another producer in Liaoning disclosed, adding that they expect to produce about 300t this month, unchanged since last December, reduced by 90% from normal months in 2023. He noted that the magnesite prices already increased over RMB30/t (USD4.80/t) in the past month and expect to move up further as magnesite suppliers now hold back from selling due to the magnesite mining restriction policy. However, they can not make any profit at the current price, so they would not increase production until the prices start to rise. They closed a deal of about 600t at RMB900/t (USD125/t) with a regular client two weeks ago. Considering the weak demand and firm refusals from buyers to higher prices, they believe that the mainstream prices of Chinese caustic calcined magnesia would remain unchanged in the coming week.
Based on a production capacity of 300,000tpy, they produced about 35,000t in 2023 and only about 900t so far this year. They produced about 300t in March, unchanged from February. Now they hold no inventory, down by about 300t from late last month.
