China Magnesium Offer Price Drops to $3,900/t

Chinese magnesium producers seem offering C&F $3,850-3,900 per tonne against Japanese consumers currently. The offer price plunged down by about $300 or 7% within October. China represents 80% of global magnesium supply volume.

Demand for magnesium is declining due to slowdown of automobile and resident markets worldwide. International magnesium market is being nominal. A dealer source said Japanese magnesium users seemed to secure enough inventories during July-September and they are minimizing procurement in October.

Chinese magnesium refining capacity is estimated to total 1.3 million tonnes per annum in 2008, up by 30% from 2007. However, the demand is declining from both overseas and domestic markets. The supply became significantly surplus against the demand.

The market price of Chinese magnesium had surged since the second half of 2007 and hit record $6,300 per tonne in early June of 2008. The price turned downward and was set at $4,100-4,200 for October-December 2008. The price is expected to decrease more for January-March 2009 since the demand would not recover within 2008.