15 Aug 08 - The export market for magnesium ingot has kept dull for over two months while the price has been decreasing. Close sources revealed that the Tianjin Customs has set up the price floor for magnesium export, which casts shadows on the market.
A Beijing-based trader revealed that a batch of magnesium ingot was rested in Tianjin port, for the contracted price of the material is much lower than USD4,800/t FOB Tianjin set by the Tianjin Customs as the minimum export price. "Those who have orders to fulfill will have to pay export tax according to the price floor, which means their export cost will be absolutely higher," said the source.
The source revealed that he's only fulfilling some old contracts signed before the price started to drop. Consumers showed no interest in his offer of USD4,200/t FOB Tianjin this week. The source plans to suspend quoting as he is not ready to pay the export tax according to the price floor which is USD500-600/t than the current market price.
An Inner Mongolia magnesium producer decided to postpone the shipment of a batch of magnesium ingot which was concluded at USD3,800/t FOB China. "We put off the fulfillment of the order which was signed half a year ago. However, hardly had we started to arrange shipment, we learnt about the limit price, so we have to postpone the shipment again," said the source.
The source has not done any export business recently but only sold some materials in the spot market. "The lowest price we accepted was RMB25,000/t (USD3,644/t) ex works," said the source, adding that they learnt that deals were concluded at prices below such a level in Shanxi's Taiyuan and Shaanxi's Fugu. According to the source, the smelter is running below its capacity of 8,000tpy with some furnaces being overhauled.
Both sources worry that the policy of price floor will hurt the already sluggish market and make the situation worse. They are having a close eye on the market and waiting for the move of the Customs.