Magnesium Market Update (March 13, 2013)

Magnesium prices have benefited from steady demand in recent weeks, but customers are looking to start negotiations for third-quarter shipments at the end of the month. In China, 99.9-percent min magnesium ingot is trading unchanged from last week, between 16,800 and 17,300 renminbi (US$2,702 to $2,783). The price for low-magnesium, battery-grade mischmetal is also flat, at 150,000 to 160,000 renminbi (US$24,024 to $25,626) per metric ton (MT).

“Trading is healthy and stocks are decreasing, so there is no need to cut prices in order to attract business,” a producer source from Shanxi told Metal-Pages.

“More overseas buyers are enquiring for the next quarter and some enquiries have translated into firm orders,” a Ningxia-based trader said.

In Europe, the market is also flat after having fallen at the start of the year in the wake of China’s removal of its 10-percent export tax on magnesium and amid concerns about the economy and weak car market. Magnesium is trading in a range between $2,900 and $2,965 per MT. The market is now expected to be quiet until third-quarter contract negotiations start, Metal-Pages reported.

Company news

West High Yield Resources (TSXV:WHY) said last week that the preliminary economic assessment report for its Record Ridge South magnesium property in British Columbia is again delayed in anticipation of additional metallurgical testing related to the recovery of magnesium. Although the company had initially planned to submit the PEA in early 2012, it now expects to do so in May.

It also noted that to date, it has achieved a 62.6-percent rate of magnesium recovery that supports “reasonable prospects of economic extraction and magnesium resource estimates.” West High Yield added that it believes “additional required testing may allow for material positive change in the PEA model assumptions.”