Some sources revealed to Asian Metal that they reduced the magnesium ingot price to cope with the weak demand in the market. Participants predict magnesium price would continually slides down in last two weeks.

A Shanxi-based smelter told Asian Metal that they offer RMB16,400-16,500/t ex works but no deal has been concluded so far this week. “I have less confidence in the future market. I think the price may drop below RMB16,000/t ex works,” the source said.

The source added that magnesium ingot supply increases in August, but the market demand is still weak. “Many consumers bought abundant magnesium ingot when the price soared, for fear the price may rise further. They have enough stock now and are not in a hurry to purchase,” the source said.

Moreover, the source confirmed that steel industry and ferrosilicon market keep sluggish. Magnesium ingot price would be dragged down. The smelter is running with a output of 600-700tpm and has a stock of 100t in hand.

Another Shanxi-based trader said to Asian Metal that they concluded a few of deals at USD2,800/t FOB Tianjin. “ I learnt that many smelters reduced offers but I don’t think the magnesium ingot price will drop below RMB16,200/t delivered to Tianjin. As far as I know, many smelters do not have stock in hand,” the source said.

The source usually purchases magnesium ingot from Taiyuan and they bought a batch of magnesium ingot at RMB16,500/t delivered to Tianjin this week.

According to latest statistics released by China Customs, exports of magnesium products rose notably in July. China exported 9,616t of magnesium ingot in July, 30.01% up month-on-month. Export value totaled USD24,335,971, increasing by 29.26%min compared to the same month last year. Exports for magnesium alloy and magnesium powder in July were 6,367t and 3,168t respectively, up by 49.86% and 156.16% respectively month-on-month. July exports for magnesium alloy and magnesium ingot rank first in the first seven months of this year, while the export volume of magnesium ingot in July is less than the figure in May, when China exported a total of 9,980t. Nevertheless, July exports for magnesium ingot, alloy and powder are 44.73%, 20.40%, 69.43% less respectively year-on-year.
India distinguished itself in the magnesium ingot importers in July. China exported 1,197t of magnesium ingot to India in July, showing an increase of 158.80% compared to June. The total export volume to India through the first seven months of this year amounts to 4,544t, 16.32% up compared to 3,906t during the corresponding period of last year. China exported 6,441t and 5,432t of magnesium ingot respectively in 2007 and 2008. A Shanxi-based trader reported that Indian buyers have been more active in the market since the financial crisis broke out than those from Europe, Japan and South Korea, many of whom suspended purchasing or left the market. On the on hand, the financial turmoil did not hit Indian economy as much as it did in other developed countries; on the other hand, Indian consumers usually do not heap up stocks, so they have to keep buying raw material in order to maintain normal production. According to an Indian trader, demand for magnesium ingot keeps steady in India which consumes about 600t of the material per month, moderately up compared to last year.
Magnesium alloy exports have been on the rise from March to July. Although the volume is still much less than the figure in the corresponding period of last year, it shows signs that demand in various sectors is recovering step by step in many countries. 3,038t of magnesium alloy were exported from China to Netherlands in July which occupied 47.72% of the total exports of magnesium alloy and increased by 118.55% compared to last month. The export volume in July is close to the average monthly export volume of 3,234t last year, indicating that the European magnesium alloy market improves.
The significant increase in export volume of magnesium powder in July shows that demand from overseas consumers gradually recovers. Some Chinese magnesium powder producers revealed that orders from foreign buyers increased in June and July. Although the purchasing quantity is much less compared to last year, domestic producers are still encouraged.
Undoubtedly, the recovery of magnesium exportation was one of the important reasons that magnesium price soared in domestic market. Some major magnesium powder producers, magnesium alloy producers as well as exporters supplemented stocks in June and July with low prices. The increased inquiries in the market stimulated magnesium ingot smelters to raise offer again and again. From the end of June to the middle of August, the mainstream price of magnesium market hiked from RMB14,900-15,200/t ex works to RMB16,500-16,800/t ex works.