China Magnesium Quarterly Price to Drop to US$ 4,100-4,200/t Level

Japanese and European magnesium buyers are expected to get lower price from Chinese suppliers for October-December shipment at the negotiation started last week. The price is likely to be US$ 4,100-4,200 per tonne, which is US$ 1,900 lower than July-September level. The price in China, which represents 80% of world supply, hit bottom and rebounded to US$ 4,200 level while the price decreased to US$ 4,100 last week, according to Japanese trader sources. The price is apparently supported by high refining cost despite of the easy supply. Some Japanese buyers already secured the material for the year at previous negotiation, according to Japanese sources. A source said Japanese buyers’ purchase volume could decrease by 20% for October-December from same period of 2007 and European buyers also reduce the volume. Magnesium refining cost increases widely due to higher cost for coal, ferrosilicon and other materials. Chinese suppliers are suffered from the lower selling price and volume and higher cost. Chinese government is expected to keep reducing the industrial output around Beijing due to Paralympic game in September despite of end of Beijing Olympic game. The restriction could impact on the local production.