- Mixed picture of price sentiment
- 2020 looks bullish
- Chinese supply curtailment
Magnesia prices have tumbled since the highs
reached in early 2018, succumbing to pressure from the
widespread stock build-up in the preceding bull market.
Fastmarkets’ price assessment for
magnesia, fused, 97% MgO, Ca:Si 1:1, lump, fob China, was
$650-750 per tonne on September 24. This compares with
$1,000-1,100 at the start of 2019 and $1,400-1,600 at the start
Despite the rapid fall in prices so far this year,
a producer of
magnesia raw materials, with operations in China, struck a
cautiously bullish note on prices for 2020 due to a shortage of
Mining operations in Liaoning, China, stalled in
August 2019, with a restart slated for the end of October. But
cold weather production restrictions could limit the restart
until the spring of 2020.
A company executive told Fastmarkets that
production had not been affected by the shutdown so far thanks
to strong ore inventories. But he conceded that the mining halt
would eventually work its way through to magnesia products.
"In Q4, or Q1 next year, we expect to see [the
effect of ore shortages]," he said.
The regional government in Liaoning appears to be
committed to supporting prices by restricting supplies, he
Fused magnesia price will not be able to fall
further, a senior executive at a major refractories trader
"I think they could go down a little bit still,"
he said. "But they cannot fall like they did this year."
But a source from European refractories producer
painted a much gloomier picture. Demand for products remained
extremely slow so there has been no need to purchase raw
materials, he said.
His company’s most recent fused
magnesia purchase was in 2018, he added, and had been expected
to meet the company’s needs for six months.
Instead, the company was now not expecting to buy before
Another refractories producer has bought magnesia
in recent months "but I’m the only one who has,"
He made purchases to meet short-term needs, he
said, despite limited demand for refractory products. But he is
not expecting inventories to start building again until the
start of next year at the earliest, he added.