China to Raise Magnesium Export Price

Japanese buyers have trouble to settle the price negotiation with Chinese magnesium suppliers for January-March shipment. Some Chinese magnesium makers stopped operations due to shortage of coal supply after major gas explosion at coal mine in Linfen, Shanxi. Shanxi is Chinese largest coal production area. The coal mine with explosion produces 300,000 tonnes of coal. With the accident, Chinese authority stopped all of coal mining operations in Linfen. Japanese trading firm source said the production resume schedule is unknown so far. Local magnesium makers also stopped the operations due to shortage of the coal, which is used for energy of the smelting. Magnesium price increases recently. China represents 80% of the world supply. World buyers increase the dependence on Chinese source more after Canadian smelter withdraw in March 2007. Some Chinese suppliers stopped the export offer after November when the domestic buyers increased the purchase price. Chinese suppliers offered US$ 4,100-4,200 per tonne to Japanese buyers for January-March shipment. Japanese source said Chinese government could add 10% export tariff on magnesium as early as January 2008. With the strong demand and higher cost, Chinese export price is expected to reach US$ 4,000.