Magnesium Market Update (November 14, 2012)

Magnesium has stabilized after a downturn last month, but business activity remains lackluster.

In China, 99.9 percent min magnesium ingot traded between RMB 17,500 (US$2,810) and RMB 18,100 ($2,907) a tonne this week, unchanged from last week. The price for low-magnesium, battery-grade mischmetal was also flat at RMB 150,000 ($24,088) to RMB 160,000 ($25,694) per tonne on thin business last week.

A producer from Shaanxi told Metal-Pages that he thinks “this is the last acceptable price for magnesium ingot producers, and magnesium alloy prices will pare losses in line with the stabilizing metal market.”

After a meeting last week of the Shaanxi Magnesium Group, which is comprised of 53 magnesium smelters in Shaanxi plus its newest member, the Shaanxi Circular Economy Institute, prices stabilized, but shipments are still low, a producer source told Metal-Pages. In May, the group resorted to establishing a unified price when prices decreased.  “Downstream aluminum, magnesium powder and magnesium alloy industries have been weak, which cannot support demand for magnesium metal,” a Liaoning-based trader said.

The spot price rose in Europe to between $3,300 and $3,350 a tonne, up $100, while delivery settlements for the first quarter and first half of next year were done between $3,350 and $3,400 per tonne, as per Metal-Pages data. Prices got a boost from the signing of longer-term contracts, but the market is now expected to be quiet until the start of next year.