China’s fused magnesia export price hits two-year low

Increasing stocks and weak demand continued to weigh on China’s fused magnesia market in the week ended Friday June 7. Most producers lowered their prices to boost sales and cash flow in a flat market, leaving fused magnesia prices at their lowest level in nearly two years.

Fused magnesia prices have been on a downtrend since entering 2019 due to high stocks and slow buying activity. Additional flotation production lines for fused magnesia in Dashiqiao, Liaoning province, have increased supply and accelerated the price decline.

The reducing demand from the downstream refractory sector is another factor behind the decreasing fused magnesia price.

Refractory output has fallen so far this year, with production hubs such as Henan and Shandong provinces subject to strict environmental inspections and more local refractory companies suspending production.

China’s total output of refractory materials was 4.21 million tonnes in the first quarter of 2019, down by 11.53% year-on-year, according to data from the China Association of Refractories.

"Fused magnesia prices keep falling this year on sufficient supply. Overseas buyers are in no hurry to buy material and are expecting lower prices. Magnesia prices have increased in a large range since late 2017 due to mining restrictions on magnesite - the raw material for magnesia - and I think current prices are falling back to a reasonable level," a trader told Fastmarkets.

Fastmarkets’ assessment of the price of magnesia, fused, 96% MgO, lump, fob China, was $600-700 per tonne on June 4, widening downward from $650-700 per tonne in the previous week and hovering around the level of $580-620 per tonne last seen in the middle of 2017.

Fastmarkets’ assessment of the price for magnesia, fused, 97% MgO, Ca:Si 2:1, lump, fob China was $850-950 per tonne on June 4, down from $900-1,000 per tonne the week before and near the $800-900 per tonne level in July 2017.