Search Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5

  • By submitting this article to a friend we reserve the right to contact them regarding AMM subscriptions. Please ensure you have their consent before giving us their details.

Spot magnesium prices edge lower

Keywords: Tags  magnesium prices, automotive demand, magnesium contracts, Suzy Waite

NEW YORK — Spot magnesium prices have dipped slightly due to plentiful supply and weaker demand.

Spot magnesium prices now range from $2 to $2.25 per pound compared with $2.05 to $2.25 previously.

While there is no "excess material in the market, there’s not a shortage either," one consumer source said.

"If you talk to the producers they say they don’t have any extra material, but then suddenly a week later they have another thousand tonnes," he said. "I just think producers are running very efficiently."

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 it’s softened from last year," the consumer said, estimating prices at $1.95 to $2.10 per pound. "It’s nothing earth shattering."

But a second consumer source said that he was unable to secure any 2013 material at less than $2 per pound. "There’s 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 don’t have much (spot supply), so our offer is around $2.25 (per pound)," the second supplier said.

Magnesium’s mating season is anticlimactic, as most consumers had locked up multiyear contracts through 2013, the first supplier said.

"We didn’t 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 contracted."

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 sector’s magnesium demand will be strong in 2013, sources said.

General Motors Co., Detroit, is testing a treatment for magnesium sheet that would allow it to replace steel and aluminum in its vehicles (, Oct. 24).

But most agree that auto demand won’t 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. We’ve 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 consumer agreed.

Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.

Latest Pricing Trends