Magnesium prices up despite quiet market

Further price increases expected in 2009

by Tom Stundza -- Purchasing, 7/16/2008 11:53:00 AM

Supply tightness has kept July spot magnesium prices around $3.55/lb this month, up from an average $3.45 in June, despite reports of virtually no purchasing during a seasonal summer slowdown. Earlier this year, when market prices were moving off a plateau of $2.25, some market sources told Purchasing.com that prices could go as high as $3 because of a world shortage of supply.

Domestic output by U.S. Magnesium in Utah and imports from Israel's Dead Sea Magnesium are limited. But, because of anti-dumping duties against Chinese and other producing regions, there are few primary producer sources for U.S. spot sales. A trader tells the Platts Metals Daily news service there’s likely to be even more upward price pressure—in a wide range of $3.70 to $4—when 2009 contract negotiations open this autumn. That’s because this trader projects improved demand next year and no loosening of supply.