China’s exports of magnesium products in 2021 hit an all-time high at 477,200 tonnes, up 21% from 2020, China Nonferrous Metals Industry Association said. In the same period, average magnesium prices in China rose 86% on the year, also reaching an all-time high at one point of time in 2021.
Chinese magnesium ingot prices in 2021 averaged Yuan 25,244 per tonne ($ 3,986 a tonne). In the first quarter of 2021, multiple factors like pandemic-related issues delaying global shipments and soft domestic demand weighed on prices.
However, prices soared to Yuan 70,000 per tonne in September following a notice from China’s National Development and Reform Commission that called for capping or reducing output at Yulin’s magnesium sector amid a stronger emphasis on carbon emissions and energy controls, with such order impacting over 40 producers in the key magnesium hub, the CNIA said.
The severe jolt on output caused a ripple effect globally as several countries rely on China’s supply of magnesium. Several metals associations in Europe in October called for securing supplies following the critical shortage in China, flagging rapidly depleting stocks amid fears of running out in a matter of weeks.
The EU heavily depends on China for magnesium supply, sourcing more than 90% of its requirement from the Asian country, according to the European Automobile Manufacturers Association.
Meanwhile, the post-holiday domestic magnesium market was relatively stable as major industry players restarted, with ingot prices steady from the last week of January, according to Shaanxi Magnesium.
As some Chinese magnesium smelters are still delivering the orders placed before the holidays, most offers were at Yuan 43,000 per tonne, while those with spot stocks were more flexible and were willing to sell at Yuan 42,000-42,500 a tonne, according to sources. Both suppliers and buyers remained in a wait-and-watch mode following the Lunar New Year holidays, sources said. Greater clarity on the price trend is expected in the coming weeks as producers resume work gradually, Shaanxi Magnesium said.