Magnesium prices are expected to jump in 2008

Supply shortages, import tariffs seen increasing prices

Magnesium buyers estimate they may pay an average $2.50/lb on the spot market in 2008, compared with $1.60 so far this year. Reason: Limited supply from major global suppliers, which is expected to boost market prices for the metal used in light metal die castings and, as an alloy with aluminum, in beer and beverage cans.

Market reports say U.S. Magnesium of Salt Lake City and Dead Sea Magnesium of Beer Sheva, Israel, have stopped booking guaranteed-price supply contracts for next year's deliveries. Reason: U.S. Magnesium has committed 9,900 tons of magnesium to General Motors while Dead Sea Magnesium has committed large tonnage to Volkswagen. Upshot: Spot market sales for January deliveries are being handled by traders (mostly with material from China and Russia that are subject to dumping duties) at $2.10, as compared with November deliveries averaging $1.90lb.