South Korean buyers away from magnesium ingot market

5 Sep 08 - Consumers and traders continue to stay away from the magnesium market in South Korea. Activity is not expected in the coming one or two weeks, sources reported to Asian Metal.
A trader from South Korea described the magnesium ingot market as asleep, citing that only two or three consumers have made tentative inquiries during the past two weeks without any deals concluded. "We feel that the demand is still there, but consumers are all holding on for lower prices," said the source.
The source received offers of USD4,100-4,150/t FOB China from regular suppliers in China but has no intention of buying as no good inquiries came recently. Furthermore, the source heard that some Chinese suppliers could offer as low as USD4,000/t FOB China, so he thinks that offers he received were not so practical.
Another Korean trader confirmed the static market and also expressed the concern about the future market conditions. "We find ourselves in a predicament," said the source, further explaining that major Chinese suppliers stick to the offers of USD4,150-4,200/t FOB China while consumers are talking the price down to USD3,850-3,900/t CIF Korean main ports.
"Our suppliers told us that the price floor policy issued by Chinese customs is affecting the magnesium exports. Combined with the high-held cost, they won't lower offers further," said the source. However, the source still dares not place an order without seeing solid demand in the local market.
According to the source, the company used to sell more than 500t of magnesium ingot per month, but only concluded two or three small deals in the past one month. The source does not think the market will warm up in September seeing the current weak demand.
Meanwhile, a third trader claimed that they just bought a container of magnesium ingot at USD4,000/t CIF Korean main ports, believing that the market is reaching the bottom and there is little room for the price to go down further.