SHANGHAI, Sep 1 (SMM) – Magnesium prices rose sharply due to strict environmental restrictions policy in Fugu and price hike of coal and ferrosilicon. The traded prices of magnesium ingots (99.9%) futures in Fugu rose to 26,000 yuan/mt while spot prices increased to 26,500 yuan/mt. Other regions followed the suit.
Plants held prices firm last week amid tight spot supply while downstream producers properly restocked cargoes. It is understood that the current factory still focuses on order production. Magnesium prices increased sharply as plants were out of stock, environmental policy tightened, coupled with price hike of coal and ferrosilicon. Downstream users restocked in advance due to panic sentiment. The market outlook depends on orders.
Rising magnesium prices have put a lot of pressure on downstream processing plants and distributors. Distributors who have suffered serious losses have to break their contracts.
Magnesium prices are expected to stand firm amid tight supply and rigid demand from downstream plants.
The ferrosilicon prices stood firm last week, and the operating rates in the main production areas declined further. Thus, plants raised their quotations. The price of #72 ferrosilicon (cash, natural lump) in the production area stood at 9,300-9,400 yuan/mt, and that of #75 ferrosilicon natural slump in individual areas in Shaanxi was quoted at 10,000 yuan/mt. Some factories did not offer prices and held a wait-and-see outlook. Ferrosilicon prices are expected to be firm.
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