The latest surge in prices follows extreme tightness in availability of material from European producers, and compounds\u00a0the shortage seen in China.<\/p>\n
Prices of European fused magnesia (FM) have surged to exceed the $1,000\/tonne mark this week, following repeated\u00a0upticks in Chinese prices and extremely tight availability of material reflecting on international demand flows.<\/p>\n
While the European magnesia market as a whole somehow managed to stave off the rapid price uptrend that has been\u00a0seen in China since Q2, the widespread shortage of fused magnesia has now taken the price of the commodity up by over\u00a050% against earlier levels.<\/p>\n
European-produced fused magnesia is trading between $1,000\/tonne and $1,200\/tonne FOB Europe, according to an IM\u00a0assessment on 29 August.<\/p>\n
This marks a 58% surge in prices compared with a previous level of $640-750\/tonne FOB Europe.<\/p>\n
The latest increase follows a first uptick in the price of the commodity in June, from $480-650\/tonne to $640-750\/tonne.<\/p>\n
A shortage of FM volumes available for spot selling has been the leading driver of the price surge.<\/p>\n
\u00abWe are totally sold out on all of our FM grades,\u00bb a large European producer told IM, adding that he has not had any\u00a0material available \u00abfor months\u00bb.<\/p>\n
Another seller added: \u00abWe can offer only small trial size lots.\u00bb<\/p>\n
A third producer also said he does not have anything available outside existing contracts. He added: \u00abBuyers are
\ndesperate to secure their supplies and are ready to accept any price.\u00bb<\/p>\n
Part of the current issue in availability is the fact that a large share of European production is normally booked by domestic\u00a0customers who settle yearly contracts. This crucially reduces the volumes left for spot business at times of tight supply.<\/p>\n
The situation in China has made matters worse.<\/p>\n
Disruptions in production at Chinese facilities \u2013 where operations were shut during environmental inspections in previous\u00a0months, and are very slowly restarting \u2013 continue to affect local operations.<\/p>\n
Additionally, restrictions on the use of dynamite in mining in some areas of the country led to shortage of high-quality\u00a0magnesite ore that is used for producing FM. This made production impossible also for those few factories that were able\u00a0to keep operating during and after the inspections.<\/p>\n
The market tightness became apparent as customers found it really hard to source FM volumes from China. In late July,\u00a0Chinese fused magnesia prices rose by around $200\/tonne in one go, exceeding the 2016 levels when export quotas and\u00a0duties were in place.<\/p>\n
At that time, a few European suppliers had already told IM that they were \u00abfully booked\u00bb.<\/p>\n
One noted in late July: \u00abUsually we see a slowdown in demand at this time of year, after strong buying in Q1. Now we are\u00a0receiving enquiries constantly: we are running at full capacity and cannot meet all the request. This is all down to China\u00a0being short.\u00bb<\/p>\n
Stockpiles of material available in Europe \u2013 not only FM, but also dead burned magnesia (DBM) and caustic calcined\u00a0magnesia (CCM) \u2013 made sourcing possible for Europe-based consumers in the early months of the year. This kept prices\u00a0in Europe more stable against rapid price growth in China.<\/p>\n
Availability has now become tight for some DBM grades, while CCM remains in better shape overall.
\nFM is by far the shortest material in Europe now.<\/p>\n
Other European magnesia prices have remained unchanged. Calcined agricultural magnesia stands at \u20ac240-300\/tonne\u00a0CIF EU ports. Electrical-grade fused magnesia is priced at $1,500-2,450\/tonne ex-works UK. Raw magnesite, max 3.5%\u00a0SiO2 content, is also stable at \u20ac65-80\/tonne FOB East Mediterranean.<\/p>\n
In North America, electrical-grade fused magnesia is trading at $1,700-2,500\/tonne ex-works US, while refractory-grade\u00a0fused magnesia stands at $900-1,400\/tonne FOB US.<\/p>\n","protected":false},"excerpt":{"rendered":"
The latest surge in prices follows extreme tightness in availability of material from European producers, and compounds\u00a0the shortage seen in China. Prices of European fused magnesia (FM) have surged to exceed the $1,000\/tonne mark this week, following repeated\u00a0upticks in Chinese prices and extremely tight availability of material reflecting on international demand flows. While the European … <\/p>\n