Global magnesium prices rose in the past week even as demand
remains weak after higher offer prices from Chinese sellers in
March fed through to the European market.
Metal Bulletin's European magnesium
climbed to $3,100-3,400 per tonne on April 27
from $3,100-3,200 previously, while the fob China price
reached $3000-3,200 per
tonne on Wednesday May 2 from $2,900-2,950.
Producers in China's Shanxi and Shaanxi provinces jointly
raised their ex-works magnesium prices without acid pickling
treatment to a minimum of 16,500 yuan ($2,614) per tonne on a
cash payment basis, and to 17,000 yuan per tonne on money order
basis, in mid-March
It was a joint effort to curb losses which widened following
higher taxes on surface coal and coke powders, but with little
buying activity it is not yet certain if the higher prices will
"A couple of suppliers pushed their prices up to new levels in
the hope, with no one buying anyway, that when customers come
back to market they will start negotiations at a higher level,"
a large magnesium buyer said. "I'm not sure if there'll be
enough momentum or interest to sustain those prices. People
will postpone purchases to wait and see."
But while many buyers are not in the market, there are those
supplying consumers in Europe that have had to accept higher
prices to maintain that supply.
For many consumers, such as European secondary aluminium ingot
producers that add magnesium to their casting alloys, the
volumes of magnesium purchased are so small compared with their
total raw material feed that reliable supply is more important
than fighting for every last dollar on the price. These buyers
have been paying prices at the top of Metal Bulletin's new
"We've had to pay a lot more this week," an ingot producer said
on Friday April 27, reporting deals at $3,400 per tonne after
buying consistently at around $3,150 since early February.
But for companies that buy magnesium as their core business,
the higher prices are much harder to stomach. In both Europe
and China, many are holding out for lower prices.
"If you look hard enough, there is definitely cheaper metal out
there," the buyer said, reporting bits of business at the
bottom of the European range. "It very much depends on who you
talk to and what stocks they have."
Buyers remain confident that lower prices will become more
widely available as other markets are unattractive to sellers.
Oversupply in the US market saw imports from certain regions fall in the first quarter
anti-dumping duties in Brazil mean that little is diverted
there from international markets.
"Europe is the place to sell," a trader said.