Magnesium market stable

BEIJING (Asian Metal) 3 Feb 08 - With the Chinese New Year three days ahead, magnesium market turns quieter in China. Most participants are ready to leave the market and will resume business in the middle of this month.

A Shanxi-based smelter, running at 2/3 of its capacity of 10,000tpy, reported that the market has kept slack during the past two weeks. Although the traffic condition becomes better, the market is still inactive as most consumers do not have intention of buying at the eve of the Spring Festival.

Following some major producers in Shanxi, the source raised the quotation to RMB24,500/t (USD3,408/t) ex works ten days ago without any deals concluded at the increased price. "We concluded only one small deal at a price slightly above RMB24,000/t (USD3,338/t) ex works with a consumer nearby who was in urgent need late last week and most consumers refuse to buy at prices above RMB24,000/t (USD3,338/t) ex works," said the source, putting the mainstream price in a range of RMB23,200-23,500/t (USD3,227-3,268/t) ex works.Asian Metal Copyright "That's may drag down the price a little after the Spring Festival," the source said.Asian Metal Copyright

The source revealed that most smelters will keep operating during the holiday period, which means the market supply will increase. "That's may drag down the price a little after the Spring Festival," the source said.Asian Metal CopyrightA Shanxi-based trader with an export volume of 600-700tpm, confirmed that the past week saw few activities in both domestic and export markets.Asian Metal Copyright However, the source does not think the price will drop much, and cited that the shutdown of small coal mines has led to a sharp fall in coal production in the province, while government curbs on overloading of coal trucks and poor weather caused by snow and ice reduced coal transportation capacity.Asian Metal Copyright Although the traffic condition becomes better, the market is still inactive as most consumers do not have intention of buying at the eve of the Spring Festival.Asian Metal Copyright "Short supply of coal and higher prices will help magnesium price to hold at a certain level," the source added.Asian Metal Copyright The source suspended offering for export a week ago while others put their offers at USD3,900-3,950t FOB.Asian Metal Copyright

A Shanxi-based trader with an export volume of 600-700tpm, confirmed that the past week saw few activities in both domestic and export markets. "Some smelters have closed for the Spring Festival, and foreign buyers also prefer to place orders after Chinese return from holidays," said the source.

The source suspended offering for export a week ago while others put their offers at USD3,900-3,950/t FOB. He revealed that the previous deal was concluded at USD3,800/t FOB in the middle of last month.