The export market of magnesium ingot remains quiet with few deals concluded. Besides slow demand, suppliers take the limit price set by the Customs to be another factor hindering the export business.
A Shanxi-based trader signed an export contract with a consumer from Eastern Europe at USD4,300/t FOB three weeks ago with shipment no later than August. “It is the only deal we have concluded in August,” said the source. The source reported that they arranged shipment of the contracted materials late last week, but paid export tax according to the limit price --- USD4,500/t FOB set by Tianjin Customs.
According to the source, most foreign buyers, including those from Europe, Japan, Korea and India have kept silent and are not expected to come back to the market in the short term. The source predicts that the market will keep dull at least till mid-September without solid demand in the market. Additionally, the source revealed that some suppliers are reluctant to do export business considering the price floor. “We used to export 400-500tpm of magnesium ingot every month, but current export volume is only 100-200tpm,” the source said. According to the source, more smelters have lowered their offers to USD4,050-4,100/t FOB, but most traders cannot accept prices below USD4,100/t FOB.
A Shanxi-based producer who not only sells domestically but also exports magnesium ingot confirmed that the export market has been slack without any signs showing up for the recovery. “Inquiries are not coming from foreign buyers. Although we made some unsolicited offers, few customers replied to us,” said the source, adding that they have not concluded any export deals over the past two weeks.
The source was surprised to receive counter bid of USD3,800-3,900/t FOB from some overseas buyers and claimed that they would not accept prices below USD4,050/t FOB. “If the market continues to worsen, we will have to cut output further or even halt production,” said the source. According to the source, the smelter is operating with an output of 300-400tpm based on its capacity of 10,000tpy.