A brief overview of magnesium price developments, supply and demand and significant market movers.
Magnesium prices have continued this year’s declining trend amid little demand and high stocks, while the removal of China’s 10-percent export tax has yet to translate into orders. In China, 99.9-percent min magnesium ingot traded between 16,550 and 17,100 renminbi (US$2,677 to $2,766), down from between 16,700 and 17,200 renminbi ($2,701 to $2,781). The price for low-magnesium, battery-grade mischmetal was flat, trading between 140,000 and 150,000 renminbi ($22,644 to $24,261) per metric ton (MT).
“Buyers are waiting for metal prices to touch rock bottom,” an unnamed producer for Shaanxi told Metal-Pages, adding that buyers in the magnesium powder and alloy industries usually buy hundreds of metric tons, but are now purchasing on a “hand-to-mouth basis and awaiting lower prices.”
Meanwhile, a trader from Guangdong said some producers are sitting on more than 500 MT of stocks in their warehouses.
“Producers are cutting prices to generate sales but I think it will take some time to sell stocks and prices will head down further in the coming week,” the trader said.
Looking further ahead, the China Nonferrous Metals Industry Association (CNIA) said last month that domestic magnesium consumption will increase 13 percent this year, Platts reported. Demand will be supported by a positive policy environment, including the removal of the 10-percent export tax on magnesium, CNIA Vice Chairman Sun Qian said.
Magnesium spot prices also fell in Europe this week, trading in a range between $2,880 and $2,930 per MT, down 1 percent from last week. European car makers, which are major buyers of magnesium, saw sales decline 10 percent in Western Europe in the first quarter, Metal-Pages reported, citing LMC Automotive data. It said that LMC predicts that car sales will continue falling in Europe for a total 4.2-percent decline in 2013 from last year.