8 Sep 08 - Magnesium price is still showing signs of going lower in European market because of the quiet market and sources said nothing absolutely is going on. Some participants predicted price low prices of around USD4,000/t in warehouse Rotterdam looking at the market from the side of demand, which the believe will remain weak till end of this quarter to beginning of the next quarter.
Price dropped to around USD4,200-4,300/t in warehouse Rotterdam last weak as price in Chinese market continues to go down and consumers continue to side on the side line watching.
A western trader who put the mainstream price at around USD4,200-4,300/t in warehouse Rotterdam, said they are expecting the price to go down further despite that many buyers will come back to the market this week.
"Chinese suppliers most be under pressure now and a lot offers are going on in the market,"said the source. "There is plenty magnesium our there in Chinese and many consumers are not ready to buy now."
"Small tonnages of magnesium deals are going on in Europe as consumers are not buying," said another trader. "We are expecting consumers back in the market at the middle of next quarter for end of the year deals."

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.

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.

20 Aug 08 – The export market for magnesium ingot remains quiet with few inquiries showing up. Additionally, some exporters are unclear about the price floor policy which becomes a hot topic presently, so they dare not clear customs in a hurry, market sources reported to Asian Metal.
A Shanxi-based trader who exports 200-400tpm of magnesium ingot reported that the export market has been dull for over two months while they only concluded three or four small deals with foreign customers.
AThe source revealed that they concluded a deal of 120t at USD4,300/t FOB Tianjin with a consumer from East Europe a week ago for with shipment no later than August. “We’re satisfied with the concluded price, as many others said that they could seal a deal at prices above USD4,200/t FOB,” said the source.
However, the source dares not arrange shipment for the contracted material after learning that Tianjin Customs adopted price floor policy on magnesium export and exporters should have to pay more export tax according to a limit price which is much higher than the current market price.
An official from a Shanxi-based smelter also expressed the concern about the export policy, believing that the limit price may make the market situation worse. “The export market has been sluggish. Furthermore, if more suppliers suspended exporting, the domestic price is bound to decrease due to increasing supply,” said the source.
The source revealed that the policy is still unclear now, as only one or two exporters reported that their materials were trapped by the customs. Therefore, participants have to keep a close eye on the market.
According to the source, the smelter is running with a small output of 300-400tpm, and most of the materials are sold in the domestic market. “We exported some materials via trading companies, but few traders ordered materials from us as they had not received any inquiries from foreign buyers,” said the source. The source thinks that the price of USD4,050-4,150/t FOB should be workable for the time being.