Chinese Magnesium Price Steeply Rises due to Ferrosilicon Shortage

Magnesium market price is sharply rising. Chinese producers offer C&F US$ 3,350-3,400 per tonne to Japanese consumers, which jumped by about US$ 300 or 10% in a week. China accounts for more than 80% in world magnesium production. Reduting agent ,ferrosilicon supply is shortens in China. As a result, magnesium market price is strongly increasing.

Japanese trader said ferrosilicon makers in midwestern China are under operation slowdown or suspension due to Chinese government’s regulation on electricity supply and environment. Chinese ferrosilicon price jumped by about 30% from September to early October. The price additionally upped from 8,500 yuan to 9,000 yuan in late October due to tighter supply.

Chinese magnesium export has kept the ordinary volume and schedule so far. There has been no delivery delay report from Japanese importers.

Japanese magnesium users watch Chinese high price at present. One Japanese trader said most of domestic magnesium users hold enough inventories by January 2011. Meanwhile, another source points out magnesium refineries’ ferrosilicon inventory is likely to run out after 1-2 weeks. Then the market price upsurge and supply shortage may become more serious in or after February.