Magnesium Price Surges under Temporally Shortage

International magnesium supply gets short under strong demand in China and recovering demand in Japan and Europe. The offer price from China, which represents 80% of world supply, reached C&F US$ 2,850-2,900 per tonne to Japan for September shipment, which increased by US$ 200 in 2 weeks. Japanese source said with the higher demand, Chinese refineries are restarting the idled facilities.

Chinese demand increases for magnesium as additive in die-casting and aluminium since July when the automobile sales keeps high level. Magnesium market price was moderate until early August when the refineries and dealers had 20,000-30,000 tonnes of inventory in ingot, alloy and powders. However, after inventory adjustment, the users in Japan and Europe try to secure the material lifting the market price.

Some Japanese users restart quarterly magnesium purchase while they stopped the purchase since the beginning of the year. A trading firm source said spot based buyers increase the purchase volume as much as 70-80% of high level in last year.

Chinese refineries’ operation is expected to keep low level at 10-20% of the capacity. They are trying to increase the production but the production increase could take one or more months. Under the limited supply, the international market could reach US$ 3,000 per tonne for the first time since November 2008.