Magnesium heading toward $3/lb

Suppliers have little extra metal available

By Tom Stundza -- Purchasing, 1/23/2008 11:12:00 AM

Spot-market buyers of magnesium report they are facing prices around $2.45/lb this week, up from $2.25 in mid-December, and some market sources believe the prices could go as high as $2.80-to-$3 because of a world shortage of supply. The last annual peak in price was a $2.02 average in 1996.

Magnesium, especially when alloyed with aluminum, is used to make die for numerous high-volume parts, including automotive and truck components. Burgeoning demand for titanium metal from aerospace markets has increase the need for magnesium used in the titanium-production process.

The American Metals Market metals newspaper is reporting that traders are having trouble getting enough material to fulfill orders without waits of up to two months. The two largest suppliers, U.S. Magnesium of Salt Lake City, Utah, and Dead Sea Magnesium of Beer Shiva, Israel, are reported to be sold out of 2008 material, and Norway has stopped smelting, so spot supply is left to producers in China and Russia. The problem is that Chinese magnesium comes with hefty dumping duties attached from 2005 trade cases.