Magnesium market is in a bad mood after price
reached around USD6,000-6,100/t in warehouse Rotterdam at the middle of
June and suddenly started to slide, and this week sources in Europe
told Asian Metal that they can buy material at around USD4,400-4,500/t
in warehouse Rotterdam while offers from Chinese suppliers are at
around USD4,200/t FOB China.
Prediction
in the market now is that price will continue to go down as demand of
magnesium all over the world remains scanty and bearishness in the
market will last since many consumers confirmed plenty material in
their possession.
According
to a European trader who told Asian Metal that he sold material last
week at USD4,420/t in warehouse Rotterdam, all signs show that price
will still go down further because there are some Chinese suppliers
holding plenty material and will likely to get rid of them because of
the decreasing price.
“Chinese
suppliers will find it difficult to increase the price again in a short
time,” said the source. “I am not saying they can not do it, but it
will take sometime.”
Another
European trader agreed that it may take up to end of the year to see
the price of magnesium going up again because plenty material in the
market will not allow a sudden price increase.“None
of my customers want to buy now,” said the source. “All of them are
saying they have material and will buy again probably at the end of the
year.” The source predicted that price may go below USD4,000/t FOB
China before end of the this quarter.
According to market sources in Russia, consumers
lack buying interest and few deals are concluded as some local
consumers insist on purchasing at a low price. However, the suppliers
are reluctant to sell material at lower prices after they had reduced
their offer slightly at the end of last week. Sources
said that currently the mainstream price of magnesium is around
RUB165-170/kg (USD7,033-7,249/t) in the spot market, unchanged from
last week.
A
trader in Russia revealed that due to lack of orders, they have no plan
to supplement stocks in the short term. The source offers magnesium
ingot to the domestic end-users at RUB170/kg (USD7,249/t), but they
have not concluded any deals in the recent two weeks.
The
source believes that the magnesium price is unlikely to drop further as
some traders have purchased the material at high prices before. The
price of magnesium may keep stable at RUB165-170/kg (USD7,033-7,249/t)
in the short term.
Another
trader in Russia said that consumers lack interest of purchasing with
most participants watching the market. “We hold 15 tons of magnesium
ingots on hand, but we are not eager to sell it, because the price may
be dragged down further when we rush to the market,” said the source.
The
source believes that the concluded price of magnesium is in the range
of RUB168-170/kg (USD7,161-7,249/t) in the spot market, unchanged from
last week. “Business of magnesium ingot has been thin since early July
with most participants watching the market. On the one hand, some
consumers lack interest of purchasing. On the other hand, the traders
lack enthusiasm about dealing with the material due to the volatile
market, leading to the supply decrease in the market. Therefore, I
believe that the price of magnesium may keep stable at RUB168-170/kg
(USD7,161-7,249/t) in the short term,” said the source.
15 Jul 08 – Participants has shown a surprise of
continuous downtrend of the magnesium price as it has come down more
than they have had expected.
A
European trader who bought few tons at around USD4,850/t CIF Rotterdam
last week, said he can not understand why the price is going down to
this level and he added, "If Chinese suppliers will at least accept
this price of USD4,700/t FOB, that means it will still go down.
Actually,
the magnesium market in Europe has been quiet even when the price was
going up as there are more materials in the market and the rising price
of Al is not helping the market much.
Meanwhile,
a European trader said the market kicked off this week with a price of
around USD5,100-5,200/t in Rotterdam warehouse but he can not confirm
if material can actually be obtained at a price of USD4,700/t FOB China.
"Although
the market has been quiet, but due to how Chinese suppliers are pushing
the price down, it is actually falling to unfathomable level.
Therefore, I believe it is possible that someone is buying at a price
as low as USD4,700/t FOB."
Analysts
said the price downtrend will slow down this week as suppliers have
started complaining of the low price and will try all they can to wedge
from falling further.
A magnesium metal alloy from the United States expert predicts that
from now on some years, each average car in the world, the magnesium
metal alloy dosage will attain 120 kilograms, this will make the car
reduce heavy 500 kilogramses, lowering car oil to consume thus and
consumedly with the tail spirit exhaust quantity.Currently, the global
magnesium metal alloy die-castings a piece growth rates to keep in 15%
levels continuously for several years in the car, is current and the
new industry is a little bit bright in the future.The carriage weight
lowers 10%, oil's consuming can lower 6% to 8%, the fuel efficiency can
raise 5.5%, the noise can also lower 2 decibels.Therefore, the
magnesium metal alloy has ability to make car reducing in weight, the
extension magnesium metal alloy will become solving a petroleum
resources to lack to become one of the warm important solutions with
global weather tightly in the application in the pileup.The Chinese car
engineering masters reputation chairman of the board a piece a cheerful
industry to say, our country is enhancing transportation economy energy
to reduce a row management, control high consume oil, high pollution
automobile development.Car and other applications that the pileup
industry should extend magnesium metal alloy this high strength light
metals material to carry out economy energy to reduce a row target.This
becomes Chinese magnesium industry and industrial realization
independent creative important opportunity of the car motorcycle, also
is a graveness challenge.
