Magnesium Prices Stabilise at Low Levels

SHANGHAI, Dec 5 (SMM) - The mainstream ex-factory prices of Mg90% magnesium ingots in Fugu county, Shaanxi province, were around 22,000 yuan/mt on December 5, flat from the prices on last Friday.  The stable prices at the beginning of the week suggests that market confidence has improved. On the supply side, the low magnesium prices have pressured most magnesium factories, some of whom reported losses and slipping output compared with a month earlier. A foreign trader said that currently overseas buyers mainly made inquiries after standing wait-and-see amid falling magnesium prices. If the prices could stop falling and stabilise in the near future, then the pre-Christmas orders overseas are likely to be released. According to SMM analysis, as some aluminium smelters started to issue tenders for procurement last week, the market confidence in the magnesium prices has improved. At the same time, the magnesium prices are unlikely to decline further in view of the severe losses of magnesium plants. Therefore, it is estimated that magnesium prices will stabilise at low levels in the short term. SMM will continue to closely watch the trades in the spot market.