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    Magnesium quotations up on tight coal supply

    2007-12-13 10:10:22   【Print】

    BEIJING (Asian Metal) 13 Dec 07 – All the coal mines in Linfen City in north China's Shanxi Province were forced to shut down after an explosion in a local coal mine which resulted in 105 deaths and injuries of 18 others on December 5. The closures of those mines have led to tighter supply as well as higher prices of coal, which prompted magnesium producers to raise offers further.

    A Shanxi-based magnesium ingot producer, with a small output of 200-300tpm, raised quotation to RMB28,500/t (USD3,872/t) ex works on Monday and RMB29,000/t (USD3,940/t) ex works yesterday. “Actually, as the price rises so fast, limited deals have been concluded so far this week with contracted prices ranging between RMB28,300/t (USD3,845/t) ex works and RMB28,800/t (USD3,913/t) ex works,” said the source.

    The source cited the tight coal supply resulting from the fatal mine blast for the price jump. On anticipation of coal shortage which is likely to affect the magnesium production, producers raise quotations in succession this week. 

    Another Shanxi-based producer shares the same view. Other than supply shortage of coal, the source thinks that higher prices of ferrosilicon and worse transportation situation due to snowy weather in some producing areas also stimulate producers to increase the magnesium ingot price.

    Running at its full capacity of 10,000tpy, the smelter currently puts it offer at RMB29,500-30,000/t (USD4,008-4,076/t) ex works and has reportedly sold small quantities of spot material at RMB29,000/t (USD3,940/t) ex works in recent two days. For fear that the market may keep hiking, the source is reluctant to sell output next month.

    Some other participants confirmed that the past two days saw another price jump of magnesium. Many smelters are aiming to conclude deals at RMB29,000/t (USD3,940/t) ex works or higher prices while the concluded price was around RMB28,000-28,300/t (USD3,804-3,845/t) ex works early this week.Asian Metal Copyright For fear that the market may keep hiking, the source is reluctant to sell output next month.Asian Metal Copyright With the unclear situation of coal supply in Shanxi, most producers predict that the magnesium price will not stop rising before Spring Festival even if the export market becomes dull with westerners absent for Christmas and New Year holidays.

     
     

     

    .Asian Metal Copyright For fear that the market may keep hiking, the source is reluctant to sell output next monthAsian Metal Copyright
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