Magnesium prices to stay high in Q4

BEIJING (Asian Metal) 8 Nov 07 - Magnesium ingot prices are likely to stay high in the fourth quarter of 2007, predicted Wu Xiuming, president of China Magnesium Association (CMA).

The magnesium consumption of magnesium in Chinese local market exceeded 100,000t in 2005, and reached around 150,000t in 2006. The figure is expected to be over 250,000t in 2007.Asian Metal Copyright Although few of those giant will put into production in the near term, which ensures the price to keep at a high level, the magnesium price will be bound to drop dramatically some time next year when the market supply proliferates.Asian Metal Copyright It is the strong demand from Chinese domestic market that pushes the price up constantly this year, Wu told delegates at CMA's tenth session in Nanjing.Asian Metal Copyright,Ltd.Asian Metal Copyright

However, Wu suggested that magnesium producers should be cautiously optimistic about the future market by reporting that 18 smelters with designed capacity of or above 100,000tpy are on stream or planned to be set up, mainly prompted by the hiking price of magnesium ingot this year. Wu acknowledged that the growth in output may play a crucial role in future pricing.Asian Metal CopyrightThe sales manager of Taiyuan Tongxiang Magnesium Co, the largest pure magnesium producer in the world, predicted that the price will continue to firm up before next quarter seeing the extremely short supply in the spot market.Asian Metal Copyright Although few of those giant will put into production in the near term, which ensures the price to keep at a high level, the magnesium price will be bound to drop dramatically some time next year when the market supply proliferates.Asian Metal Copyright It is the strong demand from Chinese domestic market that pushes the price up constantly this year, Wu told delegates at CMA's tenth session in Nanjing.Asian Metal Copyright

The sales manager of Taiyuan Tongxiang Magnesium Co, the largest pure magnesium producer in the world, predicted that the price will continue to firm up before next quarter seeing the extremely short supply in the spot market. "Almost all smelters have no spot material to supply, indicating that the market will continue to rise," said the source.Asian Metal Copyright Although few of those giant will put into production in the near term, which ensures the price to keep at a high level, the magnesium price will be bound to drop dramatically some time next year when the market supply proliferates.Asian Metal Copyright The company has not quoted since mid-Oct as it has not completed some long-term contracts signed at relatively low prices.Asian Metal Copyright The figure is expected to be over 250,000t in 2007.Asian Metal Copyright

According to market sources, the magnesium ingot market is getting more cluttered due to the supply tightness. Some consumers claimed that they could get material from regular suppliers at RMB22,800-23,000/t ex works with shipment in late November, while most producers claimed that they cannot accept any new orders even if buyers bid as high as RMB24,000/t ex works.Asian Metal Copyright "Almost all smelters have no spot material to supply, indicating that the market will continue to rise," said the source.Asian Metal Copyright

Meanwhile, an official from Nanjing Welbow Metals Co.,Ltd.Asian Metal CopyrightHowever, Wu suggested that magnesium producers should be cautiously optimistic about the future market by reporting that 18 smelters with designed capacity of or above 100,000tpy are on stream or planned to be set up, mainly prompted by the hiking price of magnesium ingot this year.Asian Metal Copyright, one of the largest magnesium alloy producers in the world, revealed that the company has recently halted two production lines of magnesium alloy to cope with the high price of magnesium ingot.