Domestic coal prices have surged by 83% from RMB600/t in early 2021 to RMB1,100/t and FeSi prices have increased by 75% from 5,700/t to RMB10,000/t; rapidly rising raw material costs which have boosted magnesium production costs by approximately RMB10,000/t during 2021. In addition, with industrial policy/environmental pressures continuing on smelters and steady downstream demand, magnesium prices have doubled since early 2021. As a result, some downstream buyers have had to slow or reduce new orders.
China Magnesium Association has called on all members to increase efficiency and productivity in a bid to fulfill existing orders, warning that excessive hoarding at smelters must be avoided. Meanwhile, the Association has asked the authorities for further supervision of coal and FeSi prices.