Magnesium market in short supply
2007-11-12 09:47:08 【Print】
BEIJING (Asian Metal) 12 Nov 07 – Magnesium ingot market has been in short supply for months, causing the price to keep escalating. The market has become more cluttered since early November when many smelters suspended offering with no spot material to supply. Others who have small quantities of spot material available quote extremely high prices which scare many buyers away.
Fully running at its capacity of 10,000tpy, a Shanxi-based smelter does not quote for the time being. ”We concluded a few small deals early last week at around RMB23,000/t ex works with delivery in late November. As we have no spot material to supply and inquiries keep pouring in, we decide to hold back from offering for while,” said a source from the smelter.
With about a half of the output exported, the smelter also ceases quoting for export. It signed an order in early November at USD3,150/t FOB with shipment no later than November and did no accept new orders thereafter. “We heard that some suppliers concluded deals at a price as high as USD3,400/t FOB for December shipment. However, in view of the tight supply, if we decide to sign contracts for December shipment, we plan to quote higher prices,” the source said.
A Shanxi-based trader confirmed the tight supply, citing that it is very difficult to purchase material in current market. “We received a few inquiries from overseas customers who are in need of replenishing stocks. However, as most smelters do not quote at the moment, we dare not accept any orders from overseas buyers,” said the source.
The source has visited several smelters in Shanxi and found that many large smelters have sold most of the output before next year. Meanwhile, small to medium-sized ones who have little quantities of spot materials quote a high price which buyers cannot accept for now. “I know that some smelters can supply small quantities of spot material every day, but we cannot accept the high offers of RMB24,000-24,500/t ex works,” said the source, adding that some smelters quote as high as USD3,500-3,600/t FOB for shipment in the first quarter of next year with no deals concluded.
According to the source, due to the tight availability of material as well as high-held price, the market sees few deals concluded. Many participants are confused about the market situation and have to keep a close eye on the future trend.
Fully running at its capacity of 10,000tpy, a Shanxi-based smelter does not quote for the time being. ”We concluded a few small deals early last week at around RMB23,000/t ex works with delivery in late November. As we have no spot material to supply and inquiries keep pouring in, we decide to hold back from offering for while,” said a source from the smelter.
With about a half of the output exported, the smelter also ceases quoting for export. It signed an order in early November at USD3,150/t FOB with shipment no later than November and did no accept new orders thereafter. “We heard that some suppliers concluded deals at a price as high as USD3,400/t FOB for December shipment. However, in view of the tight supply, if we decide to sign contracts for December shipment, we plan to quote higher prices,” the source said.
A Shanxi-based trader confirmed the tight supply, citing that it is very difficult to purchase material in current market. “We received a few inquiries from overseas customers who are in need of replenishing stocks. However, as most smelters do not quote at the moment, we dare not accept any orders from overseas buyers,” said the source.
The source has visited several smelters in Shanxi and found that many large smelters have sold most of the output before next year. Meanwhile, small to medium-sized ones who have little quantities of spot materials quote a high price which buyers cannot accept for now. “I know that some smelters can supply small quantities of spot material every day, but we cannot accept the high offers of RMB24,000-24,500/t ex works,” said the source, adding that some smelters quote as high as USD3,500-3,600/t FOB for shipment in the first quarter of next year with no deals concluded.
According to the source, due to the tight availability of material as well as high-held price, the market sees few deals concluded. Many participants are confused about the market situation and have to keep a close eye on the future trend.
