Magnesium ingot jumped sharply in early and mid January due to tightened raw coal supply and silicon iron prices hike.
According to a report by Shanghai Securities News on Monday, the quoted price for magnesium ingot was raised by nearly 1,000 yuan/tonne last week. Currently, ex-factory price of magnesium ingot in Shaanxi is quoted 12,000 yuan/tonnes, and transaction price is decided at 11,800-11,900 yuan/tonne.
Shaanxi province is a major magnesium production base in China, contributing about 49.1 percent output to national total. The magnesium ingot price hike was caused by an accident occurred in a coalmine in Yulin, which enormously affected coal supply for magnesium production enterprises in Shaanxi.
Meanwhile, prices of silicon iron, which weighs nearly half of production cost of magnesium, were raised up by silicon iron factories that incurred severe losses, which accordingly pushed up magnesium ingot price hike.
However, the magnesium ingot price hike is unlikely to last for long as downstream demand from aluminium alloy, motor vehicle, and steel-making remains sluggish amid their de-stocking pressure while magnesium industry still faces excessive production capacity.
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