23 Jul 08 – Magnesium ingot prices plummet again
this week in China with mainstream prices decreasing to a level below
RMB27,000/t (USD3,959/t) ex works. In view of high stockpiles and low
demand, industry insiders hold that the price may move down further in
the near term.
A
Shanxi-based magnesium producer reported that the price saw a dramatic
decrease yesterday. “We would not like to sell at prices below
RMB27,000/t (USD3,959/t) ex works, which is lower than our production
cost. However, we have to decrease our price to RMB26,700-26,800/t
(USD3,915-3,930/t) ex works to attract buyers as some others have
already accepted even lower prices,” said the source, adding that they
sold about 30t of magnesium ingot at around RMB27,600/t (USD4,047/t) ex
works last Friday.
A
major magnesium powder producer, with a capacity of 30,000tpy, has just
signed a purchase contract with a Shanxi-based magnesium ingot smelter.
“As our purchase volume is relatively large, we settled the deal at
RMB26,500/t (USD3,886/t) ex works while some other smelters insist on
selling at higher prices,” said the source.
A
Henan-based trader, who purchases about 1,000tpm of magnesium ingot to
supply domestic end users, confirmed the significant price decrease.
The source bought 100t of magnesium ingot last Friday at RMB27,300/t
(USD4,003/t) ex works, which seemed to be a favorable then. However,
the source received a few unsolicited offers slightly below RMB27,000/t
(USD3,959/t) ex works yesterday. “We’re afraid that the market will
continue to drop, so we do not plan to make bulk purchase in a short
time,” said the source.
Meanwhile,
the source learnt that more smelters in Shanxi’s Wenxi county, one of
the most important magnesium production bases were forced to halt
production for environmental problems. However, the source does not
think the closures will do great help to prevent the market from
decreasing further given the fact that most smelters in other
production bases including Taiyuan, Fugu as well as Ningxia hold large
stocks at the moment.
