Magnesium price up in China

BEIJING (Asian Metal) 21 Feb 08 - Although many participants predicted that the magnesium ingot price would move down gradually with more materials seen in the spot market, the price saw a significant increase during the past two days. Some producers attribute the price rise to tight supply of coal and hold that the market may keep firm in following two months.

A magnesium ingot producer in Wenxi, Shanxi currently quotes RMB25,000/t (USD3,497/t) ex works for 99.9% magnesium ingot whereas deals were concluded at around RMB23,500/t (USD3,287/t) ex works before the Spring Festival.Asian Metal Copyright Some producers attribute the price rise to tight supply of coal and hold that the market may keep firm in following two months.Asian Metal Copyright Although the smelter has not concluded bulk deals of common ingot at the increased price, it sold some 99.95% material to titanium producers at around RMB26,100-26,200/t (USD3,650-3,664/t) delivered.Asian Metal Copyright95% material to titanium producers at around RMB26,100-26,200t USD3,650-3,664t delivered.Asian Metal Copyright With a capacity of 5,000tpy, the smelter sells about half of its output to titanium producers.Asian Metal Copyright9% magnesium ingot whereas deals were concluded at around RMB23,500t USD3,287t ex works before the Spring Festival.Asian Metal Copyright

The source believes that the magnesium ingot price will not move down before the end of March. "Coal supply is very tight now, and we have to pay RMB670-690/t (USD94-97/t) delivered for the material while the price was only RMB600-630/t (USD84-88/t) at the beginning of this month," said the source, adding that some smelters in the region are running below capacity due to tight supply of coal.

"The price increase after the Spring Festival is totally beyond our expectations," a Shanxi-based magnesium trader said, who purchased some magnesium ingot from Yuncheng at prices ranging RMB24,000-24,500/t (USD3,357-3,427/t) ex works after the Lunar New Year holiday, almost RMB1,000/t ex works higher than the price late January. However, offers he received this week rise to RMB24,500-25,000/t (USD3,427-3,497/t) ex works.Asian Metal Copyright The source revealed that many smelters claimed that they do not have many materials available as their production was affected by the severe weather in late January, and some smelters are also running below their capacity due to shortage of coal.Asian Metal Copyright

The source revealed that many smelters claimed that they do not have many materials available as their production was affected by the severe weather in late January, and some smelters are also running below their capacity due to shortage of coal. "Although we think smelters take the lack of coal as an excuse to push up the price, the market seems to have been firming up during the past week," said the source.Asian Metal Copyright Meanwhile, Asian Metal learnt that some large-scale smelters in Taiyuan as well as many small ones in Shenmu and Fugu have not begun signing or are about to sign contracts for March delivery.Asian Metal Copyright The source reported that not all consumers have restarted purchasing, and they will continue to watch and wait for clearer market trend.Asian Metal Copyright "The price increase after the Spring Festival is totally beyond our expectations," a Shanxi-based magnesium trader said, who purchased some magnesium ingot from Yuncheng at prices ranging RMB24,000-24,500t USD3,357-3,427t ex works after the Lunar New Year holiday, almost RMB1,000t ex works higher than the price late January.Asian Metal Copyright

Another Shanxi-based producer, however, is not so optimistic about the future market. "The market is in chaos now.Asian Metal Copyright "The price increase after the Spring Festival is totally beyond our expectations," a Shanxi-based magnesium trader said, who purchased some magnesium ingot from Yuncheng at prices ranging RMB24,000-24,500t USD3,357-3,427t ex works after the Lunar New Year holiday, almost RMB1,000t ex works higher than the price late January.Asian Metal Copyright High offers can be only seen in Yuncheng, especially in Wenxi county where some major smelters usually seem aggressive. However, the price increase in Shanxi's Taiyuan and Shaanxi's Shenmu and Fugu is not very significant, and some small to medium-sized smelters are just selling at RMB23,600-23,800/t (USD3,301-3,329/t) ex works," said the source.Asian Metal CopyrightBEIJING Asian Metal 21 Feb 08 - Although many participants predicted that the magnesium ingot price would move down gradually with more materials seen in the spot market, the price saw a significant increase during the past two days.Asian Metal Copyright Meanwhile, Asian Metal learnt that some large-scale smelters in Taiyuan as well as many small ones in Shenmu and Fugu have not begun signing or are about to sign contracts for March delivery.Asian Metal Copyright With a capacity of 5,000tpy, the smelter sells about half of its output to titanium producers.Asian Metal Copyright It will be decisive to the market in March and April that whether those smelters, who may fear the possible price decrease, lower their offers or not to attract more orders.