Asian Metal News
Yulin Tianlong magnesium smelter curbed operations on 28th November, reducing its daily production from 85 t to 60 t. The company intends to produce 1.8 kt of magnesium ingot in December, down by 700 t m-o-m.
According to an internal source, firm coal prices, weak prices and stagnating sales of semi-coke, together with weak magnesium prices at RMB 22,000/t ex-works have been weighing on most magnesium smelters in Shaanxi. The company faced production costs in excess of prices and decided to cut operations last Monday. Designed with 33 ktpy capacity, the company produced 30.5 kt of magnesium in 2021 and has made 28.5 kt in the year to date.
Haotian magnesium smelter in Fugu Shaanxi curbed operations by 30% on 26th November, reducing its daily production from 90 t to 60 t. The company intends to make 1.8 kt of magnesium in December, down by 750 t m-o-m. The company has been mired in loss since early November driven by firm coal prices, stagnating sales of semi-coke, and weak magnesium prices. Designed with 35 ktpy capacity, the company produced 33.5 kt of magnesium in 2021, 29.5 kt in the year to date.
Mainstream aluminium in Shaanxi currently stands at RMB 22,000~22,300/t ex-works, continuing stable from last Friday. Given most Shaanxi producers are already at breakeven or in loss at current prices, industry commentators forecast domestic magnesium prices to rebound slightly next week – a result of smelters’ strong will to prop prices.