24 Jul 08 – With the magnesium price decreasing rapidly in Chinese domestic market, the export price has also been in decline during the past few weeks. According to market sources, export offers drop to USD4,500-4,600/t FOB from USD4,600-4,700/t FOB a week ago. However, little activity is seen in the market.
A Shanxi-based trader reported that the export market is extremely quiet. “We only received sporadic inquiries from some of our Indian customers, but buyers in Japan, Korea and European countries all keep silent,” said the source.
For fear that the market may decrease further in the rest of July, the source lowered the export offer to USD4,500/t FOB Tianjin, a little lower than offers made by other suppliers. However, foreign buyers have no interest in the decreased price.
The source used to export over 500t of magnesium ingot per month but has concluded no deal since early July. “We concluded a few deals at USD4,400-4,500/t FOB China in March, but our suppliers postpone the delivery of those contracted materials as the market shot up in the following two months. However, now that the current price is almost at the same level as our old contracted price, suppliers resumed fulfilling those contracts,” said the source.
A Shanxi-based producer confirmed the quiet export market, predicting that foreign buyers will not come back to purchase until early September. According to the source, many major consumers such as Alcoa and Alcan have been well covered till the end of the year, so they will not make bulk purchase any more, while those small to medium-sized consumers will just make hand-to-mouth purchase if the market runs at a low level when they return from holiday.
The source also reduced the export offer to USD4,550-4,600/t FOB early this week from USD4,600-4,650/t FOB last week, but no deal has been concluded. “One of our consumers claimed that they would not consider buying before the price goes down to USD4,200-4,300/t FOB. I’m afraid that the price may drop to such a low level before the end of July,” said the source.