Asian Metal News
Pengjin Magnesium at Xiaxian County Shanxi suspended its magnesium production lines in late August in the wake of stringent environmental rules and negative margins. Production costs of Pengjin average RMB15,700/t, which is higher than current market prices. Given a bleak market outlook in addition to excessive market supply going forward, the company has no plans to resume operations in the short-term.
Mainstream primary magnesium prices stand at RMB14,950~15,250/t ex-works in cash, falling by RMB150/t from last week. Market transactions were sparse – driven by fixed demand from buyers. Industry participants forecast magnesium prices to drop further by RMB100/t in the short-term.
Pengjin – designed with magnesium capacity of 24 ktpy – had 5.8 kt output in 2018 and 4.02 kt output during the first nine months of 2019. The company’s magnesium output for August was 800 t.