Magnesium ingot market summary

BEIJING (Asian Metal) 28 Dec 09 - Despite the slowdown in western demand, magnesium ingot price rises mildly in China because of the increased ferrosilicon price. As ferrosilicon market goes chaotic, some magnesium ingot producers raise their offers and some cease quoting.
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Some large-scale smelters in Shanxi's Taiyuan and Wenxi increase offers to RMB16,100-16,300/t (USD2,357-2,387/t) ex works from previous RMB15,800-16,000/t (USD2,313-2,343/t) ex works, but most domestic buyers are hesitant to place orders. Some smelters claimed deals at RMB16,000-16,200/t (USD2,343-2,372/t) ex works, but some major end users from magnesium powder and alloy sectors disclosed that they had managed to replenish stocks of magnesium ingot at RMB15,600-15,800/t (USD2,284-2,313/t) ex works from Shanxi suppliers. While some producers lift offers, some smelters in Shanxi hold back from quoting in view of the unstable ferrosilicon market. They prefer to resume offering when ferrosilicon prices stabilize.
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Some producers in Northwest China increase offers for ferrosilicon 75% to RMB6,000-6,200/t (USD878-908/t) ex works, RMB500/t (USD73/t) higher than those before the electricity price rose in Gansu price. It is said that other provinces, where many ferrosilicon smelters are located, are also about to adjust the electricity price, so ferrosilicon producers are ready to raise offers at any time. As a result, magnesium producers, who cannot settle down the raw material price, are at a loss.
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Similar to some smelters in Shanxi, most Ningxia-based magnesium smelters also suspend offering on account of the chaotic ferrosilicon market. Some smelters claim that they would not consider selling magnesium ingot at below RMB16,000/t (USD2,343/t) ex works, while some are still fulfilling contracts signed at around RMB15,700-15,800/t (USD2,299-2,313/t) ex works.
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Offering prices in Shaanxi also go up slightly. Some large-sized smelters start to quote RMB15,700-15,800/t (USD2,299-2,313/t) ex works or RMB100/t (USD14/t) less for materials without acid treatment and package. However, some magnesium powder producers and dealers reported that they succeeded in obtaining magnesium ingot without acid treatment and package at RMB15,400-15,500/t (USD2,255-2,269/t) ex works during the week.
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Domestic price increase for magnesium ingot is merely led by higher ferrosilicon price but not out of demand. Now that most westerners have left for Christmas and New Year holidays, the export market is expected to keep dull at least until the second week of January and thus producers and traders are not pinning their hope on export deals. Although exporters lift offers to USD2,680-2,720/t FOB China in accord with domestic price increase, few deals are being concluded in the export market.