Chinese export prices for fused magnesia (FM ) and dead burned magnesia (DBM) have gone on a downtrend, tracking recent falls in the domestic market after production resumed in Dashiqiao.

Chinese domestic prices for fused magnesia (FM) and dead-burned magnesia (DBM) have been on a downtrend since production was resumed by most magnesia producers in the city of Dashiqiao in Liaoning province, which in turn led to rising stock levels.

Dashiqiao closed all its DBM kilns, and some FM kilns, in October 2019 because of pollution-limitation inspections. But production has gradually resumed this yearwith producers meeting new emissions standards, increasing the domestic supply.

Exporters have also lowered their prices because of the falls in domestic prices.

Although magnesia prices drifted lower, downstream buyers showed limited buying interest because of the approach of the Lunar New Year holiday on February 4-10. Transport movements will begin to stop gradually from this week.
Fastmarkets’ assessment of the price for FM, 97% MgO (Ca:Si 1:1), was $950-1,050 per tonne fob China on Tuesday January 22, down from $1,000-1,100 per tonne the week before. The price for FM, 97% MgO (Ca:Si 2:1), was $1,200-1,300 per tonne on the same day, down week on week from $1,250-1,350 per tonne.

«Magnesia prices have fallen by 300-600 yuan [$44-88] per tonne in the domestic market on increased material availability, and we lowered our export prices this week following the domestic downtrend. While we have received a few inquiries, no deals have been concluded yet,» an exporter in Dalian told Fastmarkets.

«Magnesia prices are in a mess ahead of the Lunar New Year, with some suppliers selling at lower prices to boost cash flow, but some high-quality magnesia prices remained at a high level,» a trader said.

The price of DBM, 90% MgO, lump, was $230-260 per tonne fob China on January 22, down from $240-270 per tonne in the previous week.

The price for DBM, 97.5% MgO, lump, fell to $1,050-1,250 per tonne fob China on Tuesday from the previous $1,100-1,300 per tonne, while the price for DBM, 94-95% MgO, lump, was assessed at $580-630 per tonne fob China, also on Tuesday, down from $600-650 per tonne last week.

«We do not have a purchasing plan before the Lunar New Year,» a buyer said, «but we will watch the market carefully to see whether the Liaoning [regional] government will release explosives for use in mining in the first half of 2019.»

Magnesia prices out of China have surged in 2018 following severe environmental restrictions. Carrie Shi, Fastmarkets IM market reporter, looks over the year of shutdowns and the effect on prices.

China’s magnesia market has showed no changes in the first week after the Lunar New Year, with prices holding at current levels while more market players are yet to return from holiday this week.

China’s magnesia prices held steady after the holiday amid thin spot buying, while market logistics gradually began to recover this week and more buyers are away and not due to return until after the Lantern Festival on February 19.
Domestic prices remained soft this week due to weak demand from downstream buyers, though some producers have already resumed production and others will resume production next week.

«Our factory hasn’t resumed production this week as most workers haven’t returned from holiday. The market is quiet in both the domestic and export sectors and there are no changes on the spot market. [Ship and truck] cargo transportation has just started to recover as well,» a producer told Fastmarkets IM.

China’s magnesia market has been pressured by continuous mining restrictions and the prohibition of explosives due to stricter environmental regulations in Liaoning province over 2018, which have continued into 2019. There has been speculation on whether China’s government will remove the explosives ban in the first half of 2019, but currently no further news has been reported.

«We haven’t started new purchases this week because we are fresh back from holidays, and we still hold a watchful attitude toward the market. If the government re-permits explosives on magnesite mining this year, I think prices will have some downtrend potential,» a buyer said.

Fastmarkets IM’s assessment of the fused magnesia (FM) 97% MgO (Ca:Si 1:1) price was at $950-1,050 per tonne fob China on February 12, unchanged week on week.

While the Fastmarkets IM assessment of the price for the FM 97% MgO (Ca:Si 2:1) market was at $1,200-1,300 per tonne on Tuesday February 12, also stable with the previous week.

The price assessment for the dead-burned magnesia (DBM) 90% MgO lump market was at $230-260 per tonne fob China on February 12, also flat with the previous week.

Magnesia prices out of China have surged in 2018 following severe environmental restrictions. Carrie Shi, Fastmarkets IM market reporter, looks over the year of shutdowns and the effect on prices.