Nov 20

Magnesia prices continue to rise in China

Turbulence continues in the Chinese magnesia markets with prices of dead burned magnesia following fused magnesia upwards.

Contacts in and outside of China have confirmed to IM that dead burned magnesia (DBM) prices have stated to rise in recent weeks following the trajectory first seen in fused magnesia (FM) due to supply constraints amid a government-led environmental crackdown on polluting industries.

However quotes in the market are even more disorderly now as the whole supply chain is facing disruption with the costs incurred to upgrade facilities to meet environmental standards more considerable for some material than others, market participants told IM.

Industrial Mineral’s DBM prices have jumped around $20/tonne so far in July.

DBM 92% MgO lump FOB China price increased to $190-210/tonne 11 July, while 97.5% MgO material rose to $345-375/tonne, 90% MgO moved to $180-200/tonne and 94-95% MgO jumped to $200-275/tonne.

The supply shortage has been more severe in FM than DBM, which explains why FM prices moved up first.
Spot prices for FM 96% MgO rose to $370-400/tonne 11 July, up $10 from a week earlier but $60-80 higher than early April.

FM basis 97% MgO (Ca:Si 1:1) rose to $465-490/tonne 11 July while 97% MgO (Ca:Si 2:1) material increased to $505-560/tonne and FM MgO 98% climbed to $760-920/tonne.

Caustic calcined magnesia (CCM) prices on the other hand remain stable with 94% MgO FOB China price, for example, holding at $170-190/tonne, 90-92% MgO at $135-160/tonne and 96 MgO at $265-285/tonne.

«CCM price remains stable because it’s the first and primary processed product, and its environmental upgrade only costs around Chinese renminbi (Rmb) 100,000 before reaching the environmental standard; while DBM and FM will cost Rmb 1m for environmental upgrade,» a major producer in Haicheng told IM.

«Magnesite shortage is also a problem, as the main producing area Haicheng is still banning the use of dynamite. Without this source material, production of CCM, DBM and especially FM is affected,» a producer in Dashiqiao said. «Luckily there are some small mines in Dashiqiao and they have some production for us to use, but it is not enough».

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