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. – Japan Metal Bulletin

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China releases ferroalloy export license application procedure

China releases ferroalloy export license application procedure
According to the procedure released by Ministry of Commerce ferroalloy exporters can submit application for export license from September 1st.

For ferromanganese, ferrosilicon and silicomanganese, the government will only allow ferroalloy exports by producers that supplied more than 3,000 tonnes for export in 2007. For trade houses as well, only those that shipped more than 3,000 tonnes abroad in 2007 will be allowed to export.

For other ferroalloy products there is no export volume threshold so far.

Ferroalloy exporters can hand in applications to provincial departments from Sep 1 and the applications should be submitted to MOC before Oct 15. MOC will list the qualified enterprises before this year end.

Export license will be effective as of January 1st 2009.

MOC said in a statement on August 21st that China would set restrictions on exporters of ferroalloys and citric acid starting from September to reduce exports of the products, aiming to promote industry consolidation and curb pollution.

China has been increasing controls over exports of metals, minerals and chemical products as it aims to prevent excessive, unchecked expansion in high-polluting sectors. – Steel Guru

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Tariff break extended on Chinese ferroalloy

The European Union delayed for an extra 12 months the introduction of tariffs on a ferroalloy from China and Kazakhstan, prolonging relief for the EU steel industry.

The EU suspended duties as high as 8.2 per cent on silicomanganese, used by steelmakers including ArcelorMittal, until Sept. 6, 2009, because prices of the raw material remain "high." Last December, the EU postponed the levies for nine months because supply shortages reduced the risk that European silicomanganese producers would be hurt by "dumped," imports.

The EU is trying to strike a balance between the interests of European ferroalloy producers such as Spain's Ferroatlantica SL and users including Luxembourg-based ArcelorMittal. Ferroalloy association Euroalliages has demanded duties to punish non-EU exporters for dumping while the Eurofer steel group has said such trade protection raises costs. – Toronto Star

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China's non-ferrous sector downbeat for 2nd half

China's nonferrous metals industry will remain downbeat in the second half of this year, with rising costs and weak consumption, according to a report by the China Nonferrous Metals Industry Association (CNMIA) released July 17.

CNMIA's pessimistic estimate is based on a range of internal and external factors. By and large, increasingly expensive raw materials, labor and electricity are pushing up production costs, while downstream consumption will remain slack, hindered by a weakening global economy, an appreciating Renminbi and government export restrictions, the CNMIA said.

Regarding the prospects of the nonferrous metals industry in the second half of this year, CNMIA estimates that output will continue to grow, with combined production of 10 major nonferrous metals, namely copper, aluminium, lead, zinc, nickel, tin, antimony, mercury, magnesium, and sponge titanium, expected to increase by approximately 15% year-on-year.

According to the report, Chinese nonferrous metal producers generally saw their profits slide during the first five months of this year, and this trend is likely to continue into the latter half of the year thanks to growing production costs and falling prices.

Due to a market surplus in the first half of the year, the prices of lead, zinc, aluminum and nickel all suffered falls, and the CNMIA is not optimistic about the situation changing in the second half.

The report indicated that the total volume of imports and exports of nonferrous metals will also continue to slide, while the trade deficit is set to expand.

In addition, a report on the country's nonferrous metals industry released by the National Development and Reform Commission (NDRC) on July 14, said that combined profit growth for 73 major producers and traders of nonferrous metals in the first four months of this year decreased by 7.25% on an annual basis, and that a growing number of smelters are losing money.

The NDRC is considering taking counter-measures to ease the situation, according to the report.

Interfax commentary: Output of various nonferrous metals in China has been an issue which has made headlines in the lead up to the summer. Suggestions of production cuts for aluminum, lead and zinc have been been aired, only to be rejected as being unlikely to follow through. Whatever the NDRC's counter-measures may be, a weakening global economy and weakening demand from the globe's biggest consumer are suggesting that there is only one long-term answer to the surpluses of various metals – that market forces will have to be allowed to play their role, eliminating production when low price creates too tough an environment for all but the strongest players. – Interfax

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Antimony trioxide export market dips in China

10 Sep 08 – Chinese exporters reported few deals with the concluded price decreasing. Participants believe it is the reasonable for the adjustment of the market itself as buyers have purchased a lot in the past months.
A large South China-based trioxide smelter stated that they quote USD5,600/t FOB China for antimony trioxide 99.5%min, and the deals could be concluded at USD5,500/t FOB China, down from USD5,600-5,700/t FOB China two to three weeks ago.
The source revealed that it is very difficult to conclude deals at USD5,600/t FOB China for famous brand materials. He puts the mainstream price for all kinds of antimony trioxide at USD5,400-5,500/t FOB China this week, down by around USD100/t from two weeks ago.
Another large South China-based trioxide smelter reported several deals at USD5,500/t FOB China, down from the last deal of USD5,600/t FOB China in the end of August. "The market has been very quiet in the recent two weeks and the price decreased by around USD100/t from two weeks ago," said the source, believing that it is reasonable for the price to go down as buyers has purchased a lot in the usual quiet season in July and August. However, they still hold stocks on hand. Therefore, there are fewer inquiries from buyers now than in August.

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Chinese antimony trioxide market drops

10 Sep 08 – Chinese antimony market drops this week as buyers stay away from the market and stop making purchases because they believe the market is going to decrease further.
An export enterprise supplier reported deals of antimony trioxide 99.5%min with exporters at around RMB37,000/t down from RMB37,000-37,500/t several days ago. The price for domestic sales is at around RMB37,200-37,300/t for the same grade materials, down from RMB37,500-38,000/t two weeks ago.
The source said, "The market is very quiet this week and we received fewer inquiries this week than last week." She believes that the market may decrease further slightly in the near future as according to her, buyers find the market is decreasing and may not come back to the market within two weeks. Where the market will go in the future depends on buyers demand for the trioxide material.
A Hunan-based smelter with a monthly production capacity of around 300 tons reported around 50 tons of antimony trioxide early this week concluded at RMB36,500-37,000/t.
The source puts the mainstream price of all grade antimony triode at RMB36,500-37,500/t at present. She confirmed that the market is decreasing but they find that it is difficult to get antimony ingot again. Therefore, the source believes that the market may increase slightly due to the above mentioned reason.

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Producers: Magnesium ingots market to stabilize

9 Sep 08 – Producers believe that the magnesium ingot market is leveling off after the price falls from RMB36,000-36,500/t (USD5,263-5,336/t) ex works early June to current RMB24,000-24,500/t (USD3,509-3,582/t) ex works which is close to the production cost. However, they are not confident in saying that more activity will be seen in the market in the rest of this month as most consumers still have little interest in purchasing.
"I don't think the magnesium ingot price will drop further; otherwise, more producers who will run at a loss may have to shut down," an official from a Shanxi-based smelter said to Asian Metal.
The source currently holds the quotation higher than RMB24,500/t (USD3,582/t) ex works but no deal has been concluded since early this month. The source acknowledged that more deals were reportedly concluded at RMB24,100-24,300/t (USD3,523-3,553/t) ex works during the past week and also heard of the low price of RMB23,800-23,900/t (USD3,480-3,494/t) ex works that appeared in Fugu, Shaanxi.
The smelter is running with an output of around 700-800tpm and the expansion project is underway. Its total capacity will reach 15,000tpy after the new furnaces are put into production in October. Considering that more new smelters or expansion projects will put into production soon, the source predicts that the magnesium market will keep low in the rest of this year with prices fluctuating around the production cost.
A major Ningxia-based producer with a capacity of 1,500tpm reported a concluded deal at RMB24,200/t (USD3,538/t) ex works. The source revealed that the company is focusing on domestic sales, and no export business has been closed over the past several weeks as most foreign buyers shunned the market.
The source also believes that there will be little room for magnesium ingot price to go down further in view of the increased production cost. "The current price is approaching the bottom line, so smelters will try their best to prevent the price from going lower," said the source.
With a stock of 200-300t, the source also takes a negative expectation on the future market, believing that situation of oversupply is likely to keep up to the fourth quarter.

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