Magnesium Market Price Sharply Surges in China

Magnesium market price is rising in China which accounts for 80% in the world total magnesium supply. Chinese ingot producers presently offer CFR US$ 3,200-3,250 per tonne against Japanese customers, surging by US$ 120-150 in late three weeks. Chinese domestic magnesium users are in panic purchasing when the inventories are shortening at the refineries.

Magnesium refineries in Shaanxi Province produce magnesium as by-product of cokes, pointed out by an official person of Japanese nonferrous metal trading house. Thus the refineries are presently unable to meet the sharp demand increase in recent days, the source suggested.

Meanwhile, another source of Japanese trading house said almost all refineries were shut down in Shanxi Province, though where Chinese magnesium production was mainly integrated until 2010. Most refineries had closed since magnesium market price maintained low for a long time and competitions became severe with new refineries in Shaanxi.

Some of Japanese customers suggest closed refineries in Shanxi might restart operations if the market price reaches US$ 3,300 of their averaged productive cost. Magnesium refining capacity in Shanxi is estimated at 1.2 million tonnes per year. If the refineries recommence, magnesium supply and price would slightly loosen.

One Japanese trader source forecasts the market price is unlikely to keep the current strong tone by late May. The source estimated the market price might decline to around US$ 3,050 in or after June if magnesium production recovers in Shanxi.