Higher China Magnesium Spot Price

Magnesium spot market price is strong when Chinese offer price reached US$ 2,700-2,750 per tonne, which is around US$ 50 higher than the price range at quarterly negotiation for July-September. The higher price is due to lower output in China, which represents around 80% of world supply, according to Japanese trading firm source. The price is lifted by higher cost for coal and other energy and wage while the demand grows in China. The suppliers’ position is reinforced when China increased the supply share in the world after withdrawal of Canadian smelter in March. The market price in yen is relative lower due to higher yen rate against US dollar, which plunged due to subprime loan issue in USA last week. Japanese wholesale price is 340-350 yen per kilogram for magnesium and 410-420 yen for alloyed magnesium. Japanese interests expect China could impose export tax on magnesium in September or October. Some Chinese suppliers apparently include the potential tax in the offer price. Magnesium is used mainly for additive of aluminium. The demand is expected to keep firm mainly for alloyed products for automobile industry in Japan.