Towards the end of 2011, the announcement of 2012 export quotas by China’s Ministry of Commerce (MOFCOM) sent traders and consumers checking their stocks and future requirements, while Chinese producers and exporters assessed how much of their 2011 quota remained unsold.
The last quarter of the year is always a strange one in this respect, with Chinese exporters desperate to offload existing quotas of minerals - to avoid penalties and possible loss of right to export the following year - by offering bargain basement prices and a short-lived honeymoon for consumers.
Magnesia, rare earths
During late October, dead burned magnesia prices plummeted to levels as low as $350-400/tonne from $400-450/tonne for DBM90 FOB, prompting one consumer to describe it as a “magnesia fire sale”.
By mid-December, a Chinese industry source commented to IM: “The ‘fire sale’ is very near to finished but prices are still in the...