More magnesium smelters especially in South Shanxi reduce output or even halt production due to the continuously sluggish situation, market sources reported to Asian Metal today.
"We reduced production by 2/3 in the middle of July," said a producer in Jiang county, Shanxi Province whose capacity of magnesium ingot expanded from 10,000tpy early this year from previous 3,000tpy.
"As demand has kept weakening, and prices have also been in decline, we have to reduce our output," said the source. With some materials in stock, the smelter refuses to sell any materials at prices below RMB26,000/t (USD3,807/t) ex works which is said to be its production cost. However, the source has no confidence in seeing a better market in August in view of the weak demand.
Meanwhile, the source revealed that some smelters nearby have already shut down due to either environmental problems or the bearish market.
Another smelter in Shanxi's Wenxi county, with a capacity of 600tpm, halted production in early July. "In the light of current prices of raw materials, the production cost of magnesium ingot should be at least RMB26,000/t (USD3,807/t) ex works in South Shanxi," said the source. "However, few smelters can obtain such a price for now." Therefore, the source has no plan to restart in the short term.
The source learnt that the magnesium ingot market continues to worsen and more smelters have begun to sell at prices of RMB25,300-25,500/t (USD3,704-3,734/t) ex works. "We heard that some small smelters undersold materials at a price as low as RMB24,500/t (USD3,587/t) ex works when cash was urgently needed, but we could not confirm such a low price," said the source.
Asianmetal(English) http://www.asianmetal.com 0394
The source also holds a pessimistic attitude towards the future market, believing that the price will probably drop to RMB24,000/t (USD3,514/t) ex works or lower levels soon.
"We reduced production by 2/3 in the middle of July," said a producer in Jiang county, Shanxi Province whose capacity of magnesium ingot expanded from 10,000tpy early this year from previous 3,000tpy.
"As demand has kept weakening, and prices have also been in decline, we have to reduce our output," said the source. With some materials in stock, the smelter refuses to sell any materials at prices below RMB26,000/t (USD3,807/t) ex works which is said to be its production cost. However, the source has no confidence in seeing a better market in August in view of the weak demand.
Meanwhile, the source revealed that some smelters nearby have already shut down due to either environmental problems or the bearish market.
Another smelter in Shanxi's Wenxi county, with a capacity of 600tpm, halted production in early July. "In the light of current prices of raw materials, the production cost of magnesium ingot should be at least RMB26,000/t (USD3,807/t) ex works in South Shanxi," said the source. "However, few smelters can obtain such a price for now." Therefore, the source has no plan to restart in the short term.
The source learnt that the magnesium ingot market continues to worsen and more smelters have begun to sell at prices of RMB25,300-25,500/t (USD3,704-3,734/t) ex works. "We heard that some small smelters undersold materials at a price as low as RMB24,500/t (USD3,587/t) ex works when cash was urgently needed, but we could not confirm such a low price," said the source.
Asianmetal(English) http://www.asianmetal.com 0394
The source also holds a pessimistic attitude towards the future market, believing that the price will probably drop to RMB24,000/t (USD3,514/t) ex works or lower levels soon.
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