Magnesium ingot prices rise

BEIJING (Asian Metal) 4 Aug 09 – Magnesium ingot price has been on the rise over the past week and producers are trying to push the price up further on account of more orders as well as higher ferrosilicon price.
A Shanxi-based trader reported to Asian Metal that producers in Shanxi are offering RMB15,800-16,000/t (USD2,313-2,343/t) ex works for magnesium ingot. According to the source, producers in Wenxi either have no spot material available or have only small quantities in stock. The supply in the region is relatively tight, so producers there put their offers at RMB16,000/t (USD2,343/t) ex works, up from RMB15,700-15,800/t (USD2,299-2,313/t) ex works last week. Meanwhile, the source added that producers in Taiyuan also lift offers to RMB15,800-15,900/t (USD2,313-2,328/t) ex works.
"We ordered some magnesium ingot at around RMB15,300-15,400/t (USD2,240-2,255/t) ex works in Wenxi two weeks ago but now regular suppliers do not sell the material at prices below RMB15,800/t (USD2,313/t) ex works," said the source. "Producers said their production cost rises on higher ferrosilicon price and they also receive more orders. That's why they keep increasing offers."
The source confirmed that domestic demand turns better, citing that he sold around 300t of magnesium ingot to domestic customers in July while the trading volume was 100-200t in May and June. However, the source said the market has not fully recovered yet and he believes that the price may fluctuate in a narrow range around RMB16,000/t (USD2,343/t) ex works.
An official from a Shaanxi-based smelter confirmed the price increase of magnesium ingot. Producers in Shaanxi increase offers to around RMB15,500-15,600/t (USD2,269-2,284/t) ex works from RMB15,300-15,400/t (USD2,240-2,255/t) ex works last week, though some customers can still get the material without acid treatment and package at RMB15,300-15,350/t (USD2,240-2,247/t) ex works from long-term suppliers. "Some producers still have stocks, but in view of the increasing price, they are reluctant to sell," said the source.
The smelter is running fully at its production capacity of 15,000tpy and booked in advance the majority of Aug-output. The source confirmed that the price increase of ferrosilicon is one of the factors that causes magnesium ingot price to go up. According to the source, the price of ferrosilicon 75% has risen by RMB300-400/t (USD44-59/t) to around RMB5,700/t (USD835/t) delivered over the past three weeks. However, the source believes that prices for both magnesium ingot and ferrosilicon may not rise by a large margin in the near term.
Asian Metal learnt that other than slight increase in demand and higher ferrosilicon price, the rise in aluminum price also helps prompt magnesium ingot price up. The price of aluminum ingot in the spot market has gone up from around RMB13,650/t (USD1,998/t) to a level close to RMB15,000/t (USD2,196/t) as of today.