Magnesium prices in both Chinese and European markets slipped following China’s January 1 elimination of its 10-percent export tax. In China, 99.9-percent min magnesium ingot traded flat last week, between 16,800 and 17,300 renminbi (US$2,704 to $2,784) per tonne. The price for low-magnesium, battery-grade mischmetal was also flat at 150,000 to 160,000 renminbi (US$24,140 to $25,749) per tonne.

A trader in China’s Guangdong province said he expects export prices for magnesium to remain stable in the near term due to stock pressure in the domestic prices.

“So far as I know, many producers have hundreds of tonnes of stocks in warehouse so I think it is difficult for prices to pick up in both domestic and export markets,” the trader told Metal-Pages.

Still, overseas buyers appear to be attracted to China’s magnesium producers and have started to place orders after a quiet December. Meanwhile, China’s magnesium powder market has seen steady sales on improved demand from the steel industry, which is experiencing higher steel prices.

In Europe, prices have been slipping since magnesium traded as high as $3,350 per tonne in November and early December. The metal is now down to between $3,100 and $3,200, unchanged from last week.

One trader said prices for new shipments are at a lower level since China scrapped the export duty, according to Metal-Pages. The European market is expected to get busier, but there is still concern that the sovereign debt crisis in the European Union will put a damper on prices.