24 Jul 08 – With the magnesium price decreasing rapidly in Chinese domestic market, the export price has also been in decline during the past few weeks. According to market sources, export offers drop to USD4,500-4,600/t FOB from USD4,600-4,700/t FOB a week ago. However, little activity is seen in the market.

A Shanxi-based trader reported that the export market is extremely quiet. “We only received sporadic inquiries from some of our Indian customers, but buyers in Japan, Korea and European countries all keep silent,” said the source.

For fear that the market may decrease further in the rest of July, the source lowered the export offer to USD4,500/t FOB Tianjin, a little lower than offers made by other suppliers. However, foreign buyers have no interest in the decreased price.

The source used to export over 500t of magnesium ingot per month but has concluded no deal since early July. “We concluded a few deals at USD4,400-4,500/t FOB China in March, but our suppliers postpone the delivery of those contracted materials as the market shot up in the following two months. However, now that the current price is almost at the same level as our old contracted price, suppliers resumed fulfilling those contracts,” said the source.

A Shanxi-based producer confirmed the quiet export market, predicting that foreign buyers will not come back to purchase until early September. According to the source, many major consumers such as Alcoa and Alcan have been well covered till the end of the year, so they will not make bulk purchase any more, while those small to medium-sized consumers will just make hand-to-mouth purchase if the market runs at a low level when they return from holiday.

The source also reduced the export offer to USD4,550-4,600/t FOB early this week from USD4,600-4,650/t FOB last week, but no deal has been concluded. “One of our consumers claimed that they would not consider buying before the price goes down to USD4,200-4,300/t FOB. I’m afraid that the price may drop to such a low level before the end of July,” said the source.

24 Jul 08 - To many producers' disappointment, the magnesium market has not improved at all early this week. On the contrary, the price plummets again with participants losing confidence in the future market. The dramatic price decrease inevitably leads to panic sales. More producers, who start to abandon the unrealistic fancies about a better market soon, gradually surrender to the fact that they will have a hard time for a long period from now on.

A Shanxi-based magnesium ingot producer, with an output of 1,600tpm, reported that the domestic market has been in chaos during the past two days. Smelters lowered offers one after another to promote sales for fear that the price may decline further. According to the source, huge stocks can be seen in Shanxi's Taiyuan and Shaanxi's Fugu, the two main production bases for magnesium ingot. Other than the weak demand, the source thinks that another reason for the high stockpiles is that some producers were over-confident about the future market, so they held back from selling after the price started to drop in May and June.

The source had expected the market might continue worsening since the price started to go lower. Therefore, he is active in selling and under no pressure of stocks for the time being. According to the source, although many smelters have lowered offers to RMB26,000-26,500/t (USD3,812-3,886/t) ex works from RMB27,500-28,000/t (USD4,032-4,106/t) ex works seen last week, the market sees little business being done as buyers would not like to place orders in the slipping market. The price is expected to move down further.

A Shanxi-based trader confirmed the drastic price decrease in the past two days, adding that more producers fell into panic sales. "Although the price retreat is within our expectations, we has not expected that the price plummeted to RMB26,000/t (USD3,812/t) ex works within such a short period," said the source. "To some smelters in South Shanxi, the price of RMB26,000/t (USD3,812/t) ex works is lower than their production cost." However, all domestic consumers or overseas buyers have no plan to purchase, so bulk orders are seldom seen in the market. With more materials being piled up, smelters have to cut down offers to attract buyers. "We're seeing a buyer's market now," said the source.

The source predicts that the market will keep slipping on high stockpiles. "According to our conservative estimate, the quantity of stocks in Taiyuan is 15,000t at least for now, and the number may be 6,000-7,000t in Shaanxi's Fugu," said the source. "Under such a situation, producers should get themselves ready for a tough time."

The source received many unsolicited offers which decrease to RMB26,000-26,500/t (USD3,812-3,886/t) ex works from RMB27,000-27,500/t (USD3,959-4,032/t) ex works last week. However, he has no plan to buy for lack of orders.

23 Jul 08 –Magnesium price came down again in European market as offers from Chinese suppliers slide to around USD4,500-4,600/t FOB from the record high of around USD5,900-6,000/t FOB sold last month. Price in European market took a step down from USD5,100-5,200/t to around USD4,900-5,000/t as demand remains weak.

According to sources, price is expected to move down to around USD4,500/t in warehouse Rotterdam before end of the month as demand keeps weak and it seems suppliers will continue to reduce the price.
A source who concluded deals this week at USD4,900/t in warehouse Rotterdam, down from his last of around USD5,000/t and put the mainstream price at around USD4,900-5,000/t in warehouse Rotterdam told Asian Metal that consumers are not buying much, which is pressing the price down.

"I think the price will shift down to around USD4,700-4,800/t before end of the week as I do not think the week demand will ease in a short time," said the source. "There is enough material in Europe to buy now."

Many sources are pessimistic on the future position of the market as the quantity of stock increase and low price emerged from Chinese suppliers.

A European trader who concluded deal at around INR4,800/kg, down from his previous deal of around USD4,900/t predicted that price may reach USD4,500/kg before end of the quarter if weak demand persists in the market.

Magnesium price has seen glorious moment and sources believe this is a time of correction and soon participants will know where the real market is.

BEIJING (Asian Metal) 4 Jun 08—Russian traders continue to raise offers of magnesium ingot with magnesium market keeps rocketing. Participants told Asian Metal that the offer reaches RUB180-185/kg (USD7,563-7,773/t) this week, up by the concluded price of RUB15/kg (USD630/t) last week.

participants said that some consumers came back to the market to purchase late last week and the spot market becomes a little active as more deals are concluded. In addtion, many traders are not sure of the future market trend and watch the market, leading to the supply decrease. Therefore, traders insist on raising offers due to tight supply

a Russian trader sold five tons of magnesium ingot at RUB175/kg (USD7,353/t) d.d.p. last week and they offer RUB190/kg (USD7,983/t) now. "We have not concluded any deal this week because many consumers are unwilling to purchase at this price yet, watching the market," said the source.
Asianmetal(English) http://www.asianmetal.com 0S82
The source believes magnesium price will go up further due to inadequate stockpiles and tight supply. The source said consumers will accept the price of RUB190/kg (USD7,983/t) in a short time.
Asianmetal(English) http://www.asianmetal.com 9CFC
Another trader in Russia said, "Magnesium price is around RUB180-190/kg (USD7,563-7,983/t) and the concluded price was around RUB170/kg (USD7,143/t) last week." The source added that Chinese magnesium price influences European magnesium price, and the price in Russia follows the trend in Europe. Therefore the price will go up further with Olympic Games approaching, but it may drop drastically after that.