Magnesia producers ramp-up output after Liaoning relaxes public health emergency status

By Carrie Shi
Published: Wednesday, 26 February 2020

Magnesia producers in the production hub of Liaoning province in China, are beginning to ramp up operations after the local government relaxed its public health emergency status to 'level three' on February 22.

Liaoning's public health emergency status had been set at 'level one' (the highest) on January 25, based on the situation for controlling the coronavirus (2019-nCoV) outbreak.

Following central government instructions, Liaoning province delayed the reopening of workplaces until February 10 to try and stop the spread of the virus, and since then magnesia producers have gradually returned to work along with other local enterprizes.

No materials shortages have been seen in China’s magnesia market, so far, and some producers have lowered their offer prices on the spot market to boost sales and cashflow and to maintain normal production, sources said.

"Magnesia supply remains sufficient due to long-term overcapacity," a producer source told Fastmarkets. "Downstream demand is recovering gradually, but has not picked up greatly [as yet], so magnesia prices are still under pressure."

Fastmarkets' price assessment for magnesia, fused, 96% MgO, lump, fob China, were at $380-480 per tonne on February 25, down from $400-500 per tonne a week earlier.

Fastmarkets' price assessment for magnesia, fused, 97% MgO, Ca:Si 2:1, lump, was at $500-600 per tonne on Tuesday this week, down $520-620 per tonne from the previous week.

"Fused magnesia prices became softer recently and some producers lowered their prices [in response to] current sluggish demand, but we haven’t started purchasing and are still consuming our current stocks," a buyer said.

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