Magnesium market quiet despite higher offers

BEIJING (Asian Metal) 5 Dec 08 – Magnesium market remains quiet despite that producers are trying to attract buyers back by lifting offers. Industry insiders hold that the market will not experience much improvement before the Chinese Lunar New Year in view of the continuously weak demand.
A Shanxi-based trader reported that although more buyers have started to inquire for magnesium ingot since early this week stimulated by higher offers, few of them threw out orders. "On the one hand, buyers have no need to purchase magnesium ingot because no order for downstream products is to be carried out; on the other hand, they're not anxious to buy in even if the offering prices have increased slightly as they strongly believe that the price will not rise affected by weak demand worldwide," said the source.
According to the source, most producers in Shanxi have increased offers of magnesium ingot to a level above RMB16,000/t (USD2,326/t) ex works with some quoting as high as RMB16,500/t (USD2,398/t) ex works currently. However, few deals have been concluded at prices higher than RMB16,000/t (USD2,326/t) ex works. The source reported that his last purchase was made at around RMB15,400/t (USD2,238/t) ex works early last week and immediately sold the material to a domestic end user.
The source used to sell 300-400t of magnesium ingot to domestic consumers as well as exporters, but the monthly trading volume is only 60-70t presently.
A small-scale magnesium producer based in Shanxi, with a capacity of 3,000tpy, reported that most smelters who have stocks on hand have raised offers of magnesium ingot to around RMB16,000/t (USD2,326/t) ex works or higher levels in view of the low production in China. However, the market is as quiet as it was in the past two weeks.
"We don't see any change in the market and think the current situation may keep up till the end of this year," said the source, adding that they have not concluded any deals since they sold a small quantity of magnesium ingot at a price below RMB14,000/t (USD2,035/t) ex works a week ago.