Magnesium prices slip on supply glut
CHICAGO Spot magnesium prices have slipped in recent weeks as market participants expressed concern about supply outstripping demand in most regions of the world.
AMMs spot magnesium price has dropped to between $1.88 and $2.22 per pound from between $2.00 and $2.25 previously.
Spot business has been thin in a domestic market generally characterized by long-term supply agreements, industry players said. But some also said prices had been trending downward in spot deals they had transacted.
"We see prices coming down a little bit," one consumer said. "It seems that capacity is growing at a faster clip than demand, and as more capacity comes online there is downward pressure on price."
The one exception might be China, where domestic consumption appears to be up, the consumer said. But even in China, prices are coming down, a trend that the rest of the world generally follows, he said.
A trader questioned the notion that demand anywhereeven in Chinamight be good. "Nothing is happening. (Its) dead as a proverbial doornail, whether youre talking Europe, China or America," he said. "Usually somewhere is exciting. But now its tediousbeyond tedious."
The trader agreed that a global supply glut was likely behind the dip in prices and in spot activity.
But one producer source strongly disagreed with those market assessments. "Our business right now is really good. Our demand is very strong," he said but added that prices for his firm are largely based on fixed-price annual contracts and that he had not been involved in the spot market recently.