Producers and traders reported weak demand in magnesium export market. Besides that most European buyers are on summer vacations, buyers from Asian countries are also not active in purchasing.
A Shanxi-based trader who exported over 500tpm of magnesium ingot before the second quarter has not concluded any new deals since early July. The source reported that no European buyers are in the market now, and he only received sporadic inquiries with small quantities from some Indian buyers. However, buyers would not like to accept the offer of around USD4,300/t FOB Chinese main ports.
The source thinks that many consumers, especially Europeans, have piled up more than enough materials before May for fear that the supply may be interrupted during the Olympic Games. Additionally, many of them are absent from the market for holidays, leading to very weak demand.
A Shanxi-based producer, running below its capacity of 10,000tpy confirmed the slack export market, citing that no inquiries have been received during the past two weeks.
“Most producers are selling in the domestic market due to weak demand from foreign buyers,” said the source. “We made some unsolicited offers of USD4,300-4,350/t FOB Tianjin this week but have not received any response from our customers.”
The source learnt that some smelters could afford a price as low as USD4,200/t FOB, but claimed that they would not accept such a low price. “We’d rather sell at RMB25,000/t (USD3,650/t) ex works in the domestic market than export at USD4,200/t FOB,” added the source.
The source expects that the export market may pick up late August or early Septemper when most foreign buyers return to the market to supplement stocks.