17 Jun 08 - Owing to lack of consumer demand, the magnesium market still keeps quiet. Although smelters are trying their best to prevent the price from falling further, industry insiders believe that the price is likely to continue moving down slowly and steadily in the following two or three weeks as they still observe the oversupply in the market.
A Shanxi-based producer, who expanded its capacity from 3,000tpy to 10,000tpy in the second quarter this year, reported that they are under great pressure of the sluggish market. "We have lowered our offer to RMB28,300/t (USD4,125/t) ex works, but there are still no buyer showing interest," said the source.
Running at its full capacity for the time being, the smelter holds more than 200t of magnesium ingot in stock. The source thinks that demand from magnesium alloy and powder industry is still there, but most consumers are holding on for lower prices.
Asianmetal(English) http://www.asianmetal.com VF94
With a pessimistic expectation on the future market, the source predicts that the mainstream price of magnesium ingot will soon drop below RMB28,000/t (USD4,082/t) ex works. He takes the high stockpiles in Shaanxi to be a potential hazard to the whole market. "If more smelters who have large quantities of materials on hand started to empty stocks, the market will be dragged down sharply and rapidly," the source added.
An official from a Shaanxi-based smelter claimed that they just sold small tonnages of magnesium ingot at RMB29,500/t (USD4,300/t) delivered to Tianjin to a trader whose previous purchase from the smelter was closed at a price much lower than the mainstream price at that time. "But for the long-term relationships, we would not have achieved such a high price," said the source, adding that many others in the region have lowered offers to RMB28,000-28,500/t (USD4,082-4,155/t) ex works.
The smelter is running fully at its capacity of 5,000tpy and holds around 400t of the metal in stock, equivalent to one month's output. The source reported that demand has been weakening during the past month, and it is difficult for them to reduce stocks. "If the current situation keeps up, we will have to lower offers further to attract buyers," said the source. Like many other smelters, the source claimed that they would not accept any prices lower than RMB28,000/t (USD4,082/t) ex works. "At least this week," he added.
A Shanxi-based producer, who expanded its capacity from 3,000tpy to 10,000tpy in the second quarter this year, reported that they are under great pressure of the sluggish market. "We have lowered our offer to RMB28,300/t (USD4,125/t) ex works, but there are still no buyer showing interest," said the source.
Running at its full capacity for the time being, the smelter holds more than 200t of magnesium ingot in stock. The source thinks that demand from magnesium alloy and powder industry is still there, but most consumers are holding on for lower prices.
Asianmetal(English) http://www.asianmetal.com VF94
With a pessimistic expectation on the future market, the source predicts that the mainstream price of magnesium ingot will soon drop below RMB28,000/t (USD4,082/t) ex works. He takes the high stockpiles in Shaanxi to be a potential hazard to the whole market. "If more smelters who have large quantities of materials on hand started to empty stocks, the market will be dragged down sharply and rapidly," the source added.
An official from a Shaanxi-based smelter claimed that they just sold small tonnages of magnesium ingot at RMB29,500/t (USD4,300/t) delivered to Tianjin to a trader whose previous purchase from the smelter was closed at a price much lower than the mainstream price at that time. "But for the long-term relationships, we would not have achieved such a high price," said the source, adding that many others in the region have lowered offers to RMB28,000-28,500/t (USD4,082-4,155/t) ex works.
The smelter is running fully at its capacity of 5,000tpy and holds around 400t of the metal in stock, equivalent to one month's output. The source reported that demand has been weakening during the past month, and it is difficult for them to reduce stocks. "If the current situation keeps up, we will have to lower offers further to attract buyers," said the source. Like many other smelters, the source claimed that they would not accept any prices lower than RMB28,000/t (USD4,082/t) ex works. "At least this week," he added.
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