Chinese low-grade magnesia prices moved downward because of increasing stock levels amid thin buying activity among downstream refractory producers, while high-grade magnesia prices were unchanged on a lack of magnesite ore.

All prices for low grades of China-origin caustic calcined magnesia (CCM), dead burned magnesia (DBM) and fused magnesia (FM), assessed by Industrial Minerals, moved down this week because of continuously rising stock levels in a flat market.

The fob China prices for CCM 90-92% MgO were down to $180-220 per tonne on Tuesday March 27, from $205-230 per tonne last week.

The price for DBM 90% MgO lump was $220-280 per tonne, down from $240-280 per tonne a week earlier.
And the price of FM 97% MgO (Ca:Si 1:1) fell by $50 per tonne to $1,100-1,200 per tonne.

Demand from overseas buyers remained slow and they were in no hurry to replenish stockpiles while waiting for lower prices. Some traders in Dalian also confirmed there were no fewer ships delivering magnesia from Bayuquan port recently.

«Chinese domestic prices of low-grade magnesia fell on sporadic buying and higher stocks. We lowered export prices following the downtrend in the domestic market, but have concluded no new deals this week,» a Haicheng magnesia producer said.

Meanwhile, high-grade magnesia prices remained at their current levels this week with high-quality magnesite still in tight supply.

«The local government hasn’t released any news about relaxing control of explosives in mining, and most magnesia producers still face limitations on how to achieve high-quality magnesite ore to produce high-grade magnesia,» another Haicheng producer said.

The fob China prices for high-grade CCM materials held stable this week $240-260 per tonne for 94% MgO, and $335-355 per tonne for 96% MgO.

The price of DBM, 97.5% MgO, lump, was unchanged at $1,100-1,400 per tonne fob China on March 27, and the price of DBM, 94-95% MgO, lump, held firm at $680-700 per tonne fob China.

The price of 97% MgO (Ca:Si 2:1) was also stable at $1,250-1,400 per tonne.

Several producers told Industrial Minerals that «if the government permits the use of explosives, high-quality magnesia prices will also face downward pressure with more spot materials rushing into the market.»

Users of silicon carbide, brown-fused alumina and calcined alumina are having to wait longer to get their consignments amid limited availability and firm prices.

Market participants active in the distribution and consumption of refractory raw materials are reporting longer lead times for deliveries of minerals including silicon carbide, and fused and calcined alumina, which is thought to be related to the persistent tightness in the market.

While prices for refractory minerals have remained firm over the past two weeks, it is taking longer to deliver material after orders are placed, Industrial Minerals has heard.

Market participants listed silicon carbide as one commodity being affected. «It’s taking almost twice the time it normally takes to have material shipped,» one distributor to Western Europe said. «We have seen lead times for refractory grade SiC going from three to five weeks.»

Sellers active in the SiC market confirmed this situation, citing disruption to production in China as a principal factor.

«It has been harder to source from China, and more expensive in some cases [than to buy from Europe]. So demand has shifted to European suppliers, which are now swamped with orders,» one supplier said.

«It is true that prices are stable, but it is harder to find material,» a distributor added.
Industrial Minerals assessed the price of refractory-grade silicon carbide, min 95%, at €1,015-1,100 ($1,244-1,348) per tonne ddp Europe on Wednesday April 4, and the price of refractory-grade silicon carbide, min 98%, at €1,050-1,250 per tonne ddp Europe.
In brown-fused alumina (BFA), it is again the uncertain production situation in China that is contributing to longer lead times.

Henan province, the largest producing area for BFA, recently announced new rounds of environmental inspections that will take place at local facilities in the coming months.
This is making it harder for facilities to operate, and is helping to lengthen the supply times.

«It’s taking five to six weeks to have BFA ready for shipment [in China]. This is, of course, affecting schedules for deliveries to customers,» a trader said.

The price of refractory-grade brown fused alumina, min 95%, 0-6mm, rose to $800-820 per tonne fob China on March 22, against $780-800 per tonne in previous weeks.
Meanwhile, the price of abrasive-grade brown-fused alumina, min 95%, FEPA F8-220 grit, remained stable at $870-920 per tonne fob China, after an increase earlier in the year.

A similar situation with longer lead times is being seen in the calcined alumina market.
«So far, shipments have been for limited volumes, and have come late,» a trader said. «Customers are concerned that they won’t get as much [material] as they have ordered for the year.»

Another distributor to Europe has been receiving inquiries from calcined alumina buyers who could not get their original consignments, but said that he was unable to meet their requests for material due to limited supply.
As reported on March 1 during the 24th Bauxite & Alumina Conference in Montego Bay, Jamaica, calcined alumina producers told Industrial Minerals that they are oversold, due to a rebound in demand following previous years of weak markets. And they warned that there is not enough supply available to meet global demand.

Magnesia

In other refractory minerals, however, European traders and buyers reported fewer problems with sourcing, although opinions vary.

In magnesia, market participants said that they could find material and have it shipped within relatively normal time frames.

«My suppliers can still deliver a few thousand tonnes [of magnesia product], and can deliver right now. I don’t perceive that to be an issue at the moment,» a Europe-based trader said.

Industrial Minerals is also aware of a number of trades for high-grade dead burned magnesia (DBM) during the first quarter of this year with volumes between 2,000 and 6,000 tonnes.

A second western consumer told Industrial Minerals that he saw «continuing limited availability and firm prices» but was nevertheless able to place orders «for the volumes we require.»

Prices for China-origin caustic calcined magnesia (CCM), DBM and fused magnesia (FM) remained unchanged this week, following a previous downward adjustment for low-grade material.

Contract prices for andalusite have edged up by about 10% from last year’s levels, with widespread consumer demand further compounding limited availability of material.

The andalusite market is set to experience further tightness in 2018 with high consumer demand said to be exceeding available supply, driving contract prices for the year upwards.

Limited availability is expected to persist throughout 2018, following a shortage that became apparent last year, when production issues led to lower output in major andalusite-producing regions.

As a consequence of that, and of ongoing high activity in the refractory raw materials space, almost all market participants active in andalusite canvassed by Industrial Minerals claim current demand will not be covered with available supplies this year.

«I am fully booked, and I imagine others will be as well,» one supplier said.

He added that some quantities produced this year may be needed to cover any outstanding volumes from last year’s contracts. His expectation is to run at full capacity throughout most of this year.

«There are no free volumes out there for the taking. Large buyers made sure they contracted early on, and even small buyers should have all agreed their supplies,» a trader said.

A second trader added: «If you need material now, you’re not in a great position. It doesn’t matter if you pay more, there just isn’t enough material around at this stage.»

The above trader said that he kept receiving inquiries from new customers, but he was unable to meet their needs.

Driving demand for the mineral was an improved performance of refractories end markets, due to rising steel output, and a widespread shortage affecting several other refractory raw materials, such as bauxite and alumina.

Andalusite can be used as an alternative to calcined bauxite for some refractory applications. As Chinese bauxite output was slashed last year following government-led inspections and shutdowns, some consumers tried to move towards andalusite in search of volumes and better pricing conditions.
This brought about a peak in demand in the andalusite space – a market that is much smaller and stable compared with bauxite. Market participants claim it will take some time before the supply/demand situation returns to normal.

Shorter contracts, higher prices

While andalusite is normally contracted with long-term, annual agreements, in a number of cases this year contracts were shortened to six months. In other deals, volumes were agreed for the year, while price was fixed only for the first six months – leaving the possibility to review the price for the second half of the year.

Some large buyers reported they managed to set year-long contracts for volume and price.
«All factors were there to drive prices upwards this year, although we should bear in mind that any movement in andalusite is going to remain quite moderate,» a second supplier said. «You are not going to see a surge similar to what we saw in [refractory grade] magnesia.»

At the time of the UniteCR conference in Chile last September, sources in contact with Industrial Minerals were already suggesting price growth was in the offing once contracts came up for renewal.

Industrial Minerals assessed the price of andalusite, min. 57% Al2O3, at €260-320($320-393) per tonne fob South Africa for 2018 contracts, compared with €240-290 per tonne last year.

While on the delivered Europe market, new contract prices for andalusite, min. 57% Al2O3, increased to €390-430 per tonne cif Europe, from €355-425 per tonne a year ago.

Both market prices have shown a rise of about 10% on previous levels, which is in line with earlier forecasts from market participants, who had pointed to an appreciation ranging from a low of 5% – for those buying particularly large quantities or managing to secure preferential conditions – to a high end of 15% for smaller purchasers or new customers.

«Your 2018 price would also depend on what kind of price you had last year – if your 2017 price was on the low end of the range, the increase may be higher. If it was on the high end [of the price range], the increase would be small,» a third trader source said.

A third supplier added: «All my selling prices have gone up this year – by different amounts, of course.»

Some market sources suggested that currency volatility may also have an effect on market prices, considering that the US dollar is going through a particularly weak phase and the South African rand has appreciated strongly over the past few weeks. However, the timing and length of contractual patterns do not support this view – as all contracts set during the final quarter of last year and the early stages of this quarter would have locked in a price level for either six or 12 months ahead, thus excluding any currency exchange effect for the time being.

If any deals were to be updated in the second half, currency effects may be factored in at that point.

Chinese low-grade magnesia prices moved downward because of increasing stock levels amid thin buying activity among downstream refractory producers, while high-grade magnesia prices were unchanged on a lack of magnesite ore.

All prices for low grades of China-origin caustic calcined magnesia (CCM), dead burned magnesia (DBM) and fused magnesia (FM), assessed by Industrial Minerals, moved down this week because of continuously rising stock levels in a flat market.

The fob China prices for CCM 90-92% MgO were down to $180-220 per tonne on Tuesday March 27, from $205-230 per tonne last week.

The price for DBM 90% MgO lump was $220-280 per tonne, down from $240-280 per tonne a week earlier.
And the price of FM 97% MgO (Ca:Si 1:1) fell by $50 per tonne to $1,100-1,200 per tonne.

Demand from overseas buyers remained slow and they were in no hurry to replenish stockpiles while waiting for lower prices. Some traders in Dalian also confirmed there were no fewer ships delivering magnesia from Bayuquan port recently.

«Chinese domestic prices of low-grade magnesia fell on sporadic buying and higher stocks. We lowered export prices following the downtrend in the domestic market, but have concluded no new deals this week,» a Haicheng magnesia producer said.

Meanwhile, high-grade magnesia prices remained at their current levels this week with high-quality magnesite still in tight supply.

«The local government hasn’t released any news about relaxing control of explosives in mining, and most magnesia producers still face limitations on how to achieve high-quality magnesite ore to produce high-grade magnesia,» another Haicheng producer said.

The fob China prices for high-grade CCM materials held stable this week $240-260 per tonne for 94% MgO, and $335-355 per tonne for 96% MgO.

The price of DBM, 97.5% MgO, lump, was unchanged at $1,100-1,400 per tonne fob China on March 27, and the price of DBM, 94-95% MgO, lump, held firm at $680-700 per tonne fob China.

The price of 97% MgO (Ca:Si 2:1) was also stable at $1,250-1,400 per tonne.

Several producers told Industrial Minerals that «if the government permits the use of explosives, high-quality magnesia prices will also face downward pressure with more spot materials rushing into the market.»

Users of silicon carbide, brown-fused alumina and calcined alumina are having to wait longer to get their consignments amid limited availability and firm prices.

Market participants active in the distribution and consumption of refractory raw materials are reporting longer lead times for deliveries of minerals including silicon carbide, and fused and calcined alumina, which is thought to be related to the persistent tightness in the market.

While prices for refractory minerals have remained firm over the past two weeks, it is taking longer to deliver material after orders are placed, Industrial Minerals has heard.

Market participants listed silicon carbide as one commodity being affected. «It’s taking almost twice the time it normally takes to have material shipped,» one distributor to Western Europe said. «We have seen lead times for refractory grade SiC going from three to five weeks.»

Sellers active in the SiC market confirmed this situation, citing disruption to production in China as a principal factor.
«It has been harder to source from China, and more expensive in some cases [than to buy from Europe]. So demand has shifted to European suppliers, which are now swamped with orders,» one supplier said.

«It is true that prices are stable, but it is harder to find material,» a distributor added.

Industrial Minerals assessed the price of refractory-grade silicon carbide, min 95%, at €1,015-1,100 ($1,244-1,348) per tonne ddp Europe on Wednesday April 4, and the price of refractory-grade silicon carbide, min 98%, at €1,050-1,250 per tonne ddp Europe.

In brown-fused alumina (BFA), it is again the uncertain production situation in China that is contributing to longer lead times.

Henan province, the largest producing area for BFA, recently announced new rounds of environmental inspections that will take place at local facilities in the coming months.

This is making it harder for facilities to operate, and is helping to lengthen the supply times.

«It’s taking five to six weeks to have BFA ready for shipment [in China]. This is, of course, affecting schedules for deliveries to customers,» a trader said.

The price of refractory-grade brown fused alumina, min 95%, 0-6mm, rose to $800-820 per tonne fob China on March 22, against $780-800 per tonne in previous weeks.

Meanwhile, the price of abrasive-grade brown-fused alumina, min 95%, FEPA F8-220 grit, remained stable at $870-920 per tonne fob China, after an increase earlier in the year.

A similar situation with longer lead times is being seen in the calcined alumina market.

«So far, shipments have been for limited volumes, and have come late,» a trader said. «Customers are concerned that they won’t get as much [material] as they have ordered for the year.»

Another distributor to Europe has been receiving inquiries from calcined alumina buyers who could not get their original consignments, but said that he was unable to meet their requests for material due to limited supply.

As reported on March 1 during the 24th Bauxite & Alumina Conference in Montego Bay, Jamaica, calcined alumina producers told Industrial Minerals that they are oversold, due to a rebound in demand following previous years of weak markets. And they warned that there is not enough supply available to meet global demand.

Magnesia

In other refractory minerals, however, European traders and buyers reported fewer problems with sourcing, although opinions vary.

In magnesia, market participants said that they could find material and have it shipped within relatively normal time frames.

«My suppliers can still deliver a few thousand tonnes [of magnesia product], and can deliver right now. I don’t perceive that to be an issue at the moment,» a Europe-based trader said.

Industrial Minerals is also aware of a number of trades for high-grade dead burned magnesia (DBM) during the first quarter of this year with volumes between 2,000 and 6,000 tonnes.

A second western consumer told Industrial Minerals that he saw «continuing limited availability and firm prices» but was nevertheless able to place orders «for the volumes we require.»

Prices for China-origin caustic calcined magnesia (CCM), DBM and fused magnesia (FM) remained unchanged this week, following a previous downward adjustment for low-grade material.