Spot export offers of Chinese magnesium ingot on a FOB basis moved lower over the past week as domestic prices eased, industry sources said Friday.
S&P Global Platts lowered its weekly magnesium ingot (minimum 99.8%) export price assessment to $2,500-$2,550/mt FOB China, from $2,530-$2,580/mt a week ago. The assessment included 17% Chinese VAT.
Platts also lowered the Chinese magnesium die-cast alloy price assessment to $2,780-$2,830/mt FOB China, from $2,810-$2,860/mt a week ago.
"Chinese magnesium offers are down this week by $30-$40/mt. Today, I received an offer around $2,500/mt FOB (for acid washed material with 17% VAT)," a Japanese trader said. The acid washing cost is about Yuan 50-150/mt ($7-$22/mt).
The trader said he was not in the market to buy but would be checking for offers in December for purchases for the first quarter of 2017.
Another Japanese trader said Chinese magnesium FOB offers continued to affected by a "lack of coal, high price of ferrosilicon price, transportation cost and so on". He last heard FOB offers around $2,580/mt at the end of October.
A north China-based analyst said domestic offers had slipped about Yuan 200/mt week on week to Yuan 16,500-16,800/mt ex-works for non-acid washed material with the 17% VAT as domestic coal prices had stabilized after the Chinese government intervention.
The northern Chinese analyst said FOB offers had softened to $2,510-$2,540/mt, down $30-$40/mt from last week.
"The domestic demand is doing fine but overseas buyers are still adopting a 'wait-and-see' approach as prices hiked sharply previously and have started to slip now," the northern Chinese analyst said.
A northwest China-based producer agreed with the lower magnesium offers but said it was a technical correction as the cost of production had not eased.
"Trucks are being used up for transporting coal as plants are stockpiling for winter. Despite the Chinese central government's invention, many of the coal mines in Shaanxi are privately owned and they do not need to follow the guidelines," the northwestern Chinese producer said.
"Ferrosilicon prices will also continue to rise as coal prices remain on an upward trend till before the Chinese Lunar New year at end January 2017."
The northwestern Chinese producer indicated Shaanxi ex-works offers for non-acid washed material with the 17% VAT at Yuan 16,500/mt, down Yuan 200/mt week on week and FOB offers at $2,540-$2,550/mt, down from $2,570-$2,580/mt.
"Traders who have bought at earlier low prices can afford with lower prices to sell," the northwestern Chinese producer said.
A south China-based trader, who heard a $20-$30/mt week-on-week fall to around $2,550/mt FOB for acid washed material with VAT, said: "Previously, FOB offers have gone up too much and now they are coming down. However, I have no overseas inquiries as buyers are adopting a 'wait-and-see' approach."
A north China-based trader had also stopped indicating FOB offers on weak demand, while a north China-based producer said he had done deals in excess of $2,500/mt FOB.