Chinese magnesium ingot prices rebound on higher feed costs
Hong Kong (Platts)--24Mar2009
platts.com
China's spot magnesium ingot prices rebounded this week with indications
at $2,650-2,700/mt FOB China, up from $2,600-2,650/mt a week ago, local
industry sources said Tuesday, attributing the gains to higher prices of
ferrosilicon, a key feedstock for magnesium production.
One Ningxia-based producer said their offers were at $2,750/mt FOB
China, although no deals were recently reported around that level. "Our offer
prices are up due to higher ferrosilicon prices following the cancellation of
the preferential power policy in our region," the producer said. "Our
production cost on magnesium ingot is up by about Yuan 700-800 ($102-117)/mt
due to higher ferrosilicon prices."
Chinese ferrosilicon producers were facing higher production costs due to
increased power costs following the cancellation of the preferential power
policy effected March 15. The preferential power rates vary according to the
area. "The cancellation of the power preferential policy applies to Ningxia,
Gansu, Qinghai and Inner Mongolia regions in China," the producer said.
Local ferrosilicon traders and producers said offers for Chinese-origin
ferrosilicon (75% grade) were now at Yuan 5,400-5,800/mt ex-plant, up from
Yuan 5,100-5,300/mt in early March.
The cancellation of the preferential policy is part of the Chinese
government's plan to further consolidate high-energy consumption industries
and better regulate power prices.
A source close to Chinese producers said offers for magnesium ingot
in China were recently higher at around Yuan 16,200/mt ex-plant, compared with
Yuan 15,800-16,000/mt a week ago. He, however, said there had been no
improvement in demand so the price increase was limited.
One Shanxi-based magnesium ingot producer added that their offers were at
$2,700/mt FOB China this week. "The $2,700/mt price level is exactly our
production cost level and we simply can't lower our prices further," the
producer said. "Cost is high due to firmer ferrosilicon prices." He added that
their magnesium alloy was offered at around Yuan 18,500/mt ex-plant. "But
there has been a lack of spot deals reported," the producer said.
Magnesium alloy offers were at around Yuan 18,000/mt last week.
Traders and producers said spot magnesium alloys trading activity was at
a standstill due to a lack of physical demand from the automotive and
industrial sectors.
Platts assessed Chinese magnesium ingot prices this week at
$2,650-2,700/mt FOB China, up from $2,600-2,650/mt a week ago, while magnesium
alloy prices edged up to $2,950-3,050/mt FOB China, up from $2,900-3,000/mt
last week.
--Wendy Shair, wendy_shair@platts.com |
