Magnesium Prices Remained Stable Thanks to Support from Rising Raw Material Prices

SHANGHAI, Oct 8 (SMM) - It is reported by leading producers that during the National Day holiday, the magnesium prices were stable and the factories made shipments in an orderly manner, while the market transaction was in a deadlock. A salesperson of a large magnesium plant revealed that magnesium ingot has been enjoying rather robust cost support from the rising prices of coal, ferrosilicon and dolomite, with mainstream transaction prices at 24,500-24,700 yuan/mt. Therefore, magnesium plants were reluctant to compromise on the prices. Regarding the following trend of magnesium prices, a senior trader said that the magnesium prices could hardly fall again in the short term with the strong cost support. Market participants were suggested to wait and see the downstream demand. According to SMM analysis, the rising operating rate of steel mills before the holiday and the increase in their restocking demand have led to the improving transactions of ferrosilicon. The October bid price of some steel mills rests around 8,400 yuan/mt, up 300-500 yuan/mt from September. At the same time, the arrival of the heating season has reinforced the market expectations for rising coal prices. In this case, it is expected that the cost support for magnesium ingot prices from raw material will gradually strengthen. SMM will keep a close eye on the changes in the magnesium prices after the holiday.