NEW YORK Spot magnesium
prices have dipped slightly due to plentiful supply and weaker
Spot magnesium prices now range
from $2 to $2.25 per pound compared with $2.05 to $2.25
While there is no "excess
material in the market, theres not a shortage either,"
one consumer source said.
"If you talk to the producers
they say they dont have any extra material, but then
suddenly a week later they have another thousand tonnes," he
said. "I just think producers are running very
Seasonality is likely the
primary reason for the demand slump, although the expectation
of strong consumption in key end markets like automotive should
keep prices from falling further, sources said.
"I think its softened from
last year," the consumer said, estimating prices at $1.95 to
$2.10 per pound. "Its nothing earth shattering."
But a second consumer source
said that he was unable to secure any 2013 material at less
than $2 per pound. "Theres nothing below $2. Producers
are sticking to their guns," this consumer said.
Two suppliers told AMM
that prices have been steady, although one supplier reported
selling a single spot load at $2.32 per pound.
"We dont have much (spot
supply), so our offer is around $2.25 (per pound)," the second
Magnesiums mating season
is anticlimactic, as most consumers had locked up multiyear
contracts through 2013, the first supplier said.
"We didnt have as much to
negotiate this year because we had a fair number of multiyear
agreements (through 2013), so to be honest it made the whole
contract season a little less exciting," the first supplier
said. "Everyone was well contracted, and people who were
traditionally on the spot market before were actually
The second supplier pegged 2013
contracts as "very much in line with 2012, both in terms of
volumes and prices."
Strong demand in automotive
should keep prices in this range, the first supplier noted.
A combination of replacing older
vehicles and a shift by automakers toward lightweight metals to
meet stricter fuel emissions standards indicates the
sectors magnesium demand will be strong in 2013, sources
General Motors Co., Detroit, is
testing a treatment for magnesium sheet that would allow it to
replace steel and aluminum in its vehicles (
amm.com, Oct. 24).
But most agree that auto demand
wont match 2012.
"I have a hard time envisioning
(automotive) will be as strong as 2012. ... (But) there really
is pent-up demand for replacing vehicles, and that continues.
Weve received strong forecasts from our aluminum
customers and strong forecasts from our auto die casting
customers," the first supplier said, forecasting a 5-percent
rise in magnesium demand.
"Auto will be strong," the first