Magnesium ingot market has kept sluggish throughout August with prices decreasing from RMB25,500-26,000/t (USD3,734-3,807/t) ex works to current RMB24,200-24,700/t (USD3,543-3,616/t) ex works. In view of the weak demand, most participants believe that the market will not recover in the first half of September.
A Shanxi-based producer reported that the market demand has kept weak since the price started to drop late May. Most consumers purchase from hand to mouth in order to avoid risks.
ARunning with the capacity of 1,500tpm, the smelter has no stock on hand as it has been active in conducting sales for fear that the market may decline further. “We sold some magnesium ingot at RMB24,200/t (USD3,543/t) ex works to regular buyers who could make cash payment, and we would not like to accept any lower prices,” said the source.
According to the source, although many smelters, especially those in Shanxi province, refuse to cut down prices further, the market is unlikely to perk up in a short time due to weak demand as well as high inventory in the spot market.
A Shaanxi-based smelter confirmed the quiet market and reported that they only received two or three inquiries from domestic consumers in the past week. The source currently offers RMB24,800/t (USD3,631/t) ex works, but no deal has been concluded at such a price. “Some buyers bid as low as RMB24,000/t (USD3,514/t) ex works, but we won’t accept such a low price,” said the source.
Running normally with a monthly output of 500tpm, the smelter holds more than 300t of material in stock. According to the source, huge quantities of magnesium ingot can be found in Shaanxi market, and some smelters even piled up more than 1,000t of the material in stock. The source thinks that weak demand coupled with oversupply will continue to weigh on the price.