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Mar 04

China’s domestic magnesia prices up on reduced supply but export prices unchanged

Sector consolidation and environmental restrictions are propelling Chinese magnesia prices higher but lackluster foreign markets are keeping export prices steady for now.

Reduced supply of magnesia from the Dashiqiao area of China and continued consolidation in the sector in Haicheng propelled domestic prices higher but export prices held steady for now because of subdued overseas demand . Chinese producers have raised their domestic offer prices by 100-200 yuan per tonne for fused magnesia (FM) and caustic calcined magnesia (CCM) after the price increase in dead burned magnesia (DBM) last week, which was caused by the closure of kilns in Dashiqiao.

“Domestic fused magnesia and caustic calcined prices also moved up by 100-200 yuan per tonne, influenced by the recent increase in dead burned magnesia, but we haven’t adjusted export prices this week because current demand remains inactive and buyers are in no hurry to place new orders while awaiting clearer direction,” a trader in Dalian told Fastmarkets IM.

Fastmarkets IM assessed the fob China price of FM 97% MgO (Ca:Si 1:1) at $1,000-1,100 per tonne fob China and the price of 97% MgO (Ca:Si 2:1) at $1,250-1,350 per tonne on Tuesday October 23 , both unchanged from the previous week.

The CCM 90-92% MgO fob China price of $180-220 per tonne was also unchanged from the previous week, according to Fastmarkets IM’s October 23 assessment

Fastmarkets IM assessed the fob China price of DBM 90% MgO lump at $240-270 per tonne, also steady from the previous week.

As part of continued efforts by authorities in Haicheng and Dashiqiao – China’s two major magnesia production hubs – to improve air quality, Dashiqiao has closed all DBM kilns to meet new emission standards.

Meanwhile, state-owned Liaoning Magnesite Mining Co (LMMC) has started trial operations this week. The government of Haicheng will strictly control the availability of explosives used in mining and the quantity of magnesite LMMC will be allowed to produce.

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