Magnesium producers expecting higher prices

After the magnesium ingot market stopped falling Tuesday, producers expect higher prices in the following week. Some of them have started to raise offers to test the market, sources reported to Asian Metal.
A Shanxi-based producer is fully running at its capacity of 5,000tpy with around 40t of magnesium ingot in stock. "We lifted our offer to RMB32,500/t ex works today from RMB31,500/t (USD4,578/t) ex works late last week, but no deal has been concluded at the increased price," said the source. "Consumers need time to accept the price rebound."
The source confirmed that the price dropped drastically last week when some small smelters undersold materials at around RMB30,000/t ex works or lower prices. "In fact, we also sold small quantities of magnesium ingot at around RMB30,500-31,000/t (USD4,433-4,506/t) ex works," said the source. However, after the price plummeted from a level above RMB36,000/t (USD5,233/t) ex works to around RMB31,000-32,000/t (USD4,506-4,651/t) ex works late last week, most smelters would not like to lower prices further.
Asianmetal(English) http://www.asianmetal.com 6BSY
The source revealed that they have received more inquiries since Wednesday, mirroring that the market demand is warming up. Therefore, the source predicts that the market will rise slightly in the following week.
Another Shanxi-based producer reported that the market trend is still unclear. "To be exact, the market stopped decreasing rather than rebounded," said the source. The source confirmed that some smelters have begun increasing offers since Wednesday, but the market still sees few deals concluded as consumers refuse to accept the increased prices. Meanwhile, the export market remains sluggish, which will not encourage the domestic price increase.
Nevertheless, the source thinks that the price is likely to keep stable or rise slightly in the near future given the fact that small smelters who have sold most of their stocks in the past two weeks will not have many materials to be released in the spot market, and large smelters are still insisting on high prices above RMB33,000/t (USD4,797/t) ex works. Furthermore, some smelters which do not comply with the environmental standard will be shut down soon before the Olympic Games.
The smelter is running at its capacity of 1,500tpm and most of the products are exported. It is still fulfilling contracts signed at USD5,800-6,100/t FOB without any new deals concluded recently. According to the source, many exporters put their offers at USD5,400-5,500/t FOB, though the export market keeps quiet.