World Mg to Keep Low in 2010, IMA Official

Executive vice president Greg Patzer of International Magnesium Association (IMA) said to a reporter of Japan Metal Bulletin in Tokyo on Thursday the world magnesium demand and supply could keep low level through 2010 under slow automobile demand. He said Chinese magnesium refineries, which represent 80% of the world supply, operate at 20-30% of the capacity as his knowledge when he visited China in February.

Mr. Patzer visited China in February to meet officials of China Nonferrous Metals Industry Association (CNIA), China Magnesium Association (CMA) and magnesium makers in Tianjin. He said many Chinese refineries stop the operations and the industry chain players including distributors are still on the way to inventory adjustment.

Mr. Patzer said Chinese magnesium refinery capacity is estimated to be as high as annual 1.3 million tonnes while the production decreased to 470,000 tonnes in 2009 from 559,000 tonnes in 2008, according to statistics of CMA and CNIA. He said the actual production could decrease more.

Mr. Patzer said the world demand could increase by 1-2% in second half of 2010 from same period of 2009 while the demand keeps low level in the first half of 2010. He said the international price level is estimated to be breakeven or loss making level for refineries.