Magnesium ingot prices on the rise

BEIJING (Asian Metal) 12 Dec 08 – Higher offers of magnesium ingot are showing up in Chinese spot market. Although producers are aiming to push the price up further, consumers think it unlikely for the price to continue to go up as demand is still not very strong.
A Shanxi-based producer raised the offer of magnesium ingot to RMB16,700/t (USD2,427/t) ex works on Thursday and a deal is expected to be concluded at such a price. According to the source, the mainstream price of magnesium ingot has increased to RMB16,300-16,500/t (USD2,369-2,398/t) ex works and some producers have begun to quote RMB16,800-17,000/t (USD2,442-2,471/t) ex works.
"We have only 30-40t of magnesium ingot on hand, so we cannot serve more orders now," said the source, adding that the smelter is running with an output of 300-400tpm based on its capacity of 10,000tpy. The source reported to have received more inquiries this week, indicating that the demand turns a little bit stronger.
A Ningxia-based supplier sold a batch of magnesium ingot at RMB16,600/t (USD2,413/t) ex works on Wednesday and lifted the offer to RMB16,800/t (USD2,442/t) ex works thereafter. "As the price goes up very fast, many smelters claimed that they have no material to supply," said the source. The source revealed that buyers could purchase magnesium ingot at RMB15,500-15,600/t (USD2,253-2,267/t) ex works early last week.
However, the source worries that the price may not continue to rise as many end users are still holding back from purchasing. Besides, the export market is still very quiet. With the Christmas holiday around the corner, the export market will become slower, which will not help the magnesium price to climb up further.
Meanwhile, a small-sized magnesium alloy producer from Jiangsu holds that the magnesium ingot price will not rise much and is even likely to retreat late this month. "Many magnesium alloy producers in the coastal areas are still out of production, so the demand for magnesium ingot remains low. There is no reason for the price to go up," said the source. Nevertheless, the source confirmed that many magnesium ingot smelters have halted production in succession during the past two months, resulting in a great decline in output.
The source bought less than 20t of magnesium ingot at RMB16,200/t (USD2,355/t) ex works on Tuesday and will not make purchase before the Spring Festival.