Singapore (Platts)--31Jan2013/642 am EST/1142 GMT

Spot export trades for Chinese magnesium ingot on a FOB basis stayed lackluster as the overseas buying interest remained thin and done deals remained rare, industry sources said Thursday.

Export offers were generally holding steady around $2,850/mt FOB China Thursday, similar to the previous week.

Platts on Thursday widened the weekly magnesium ingot (minimum 99.8%) assessment to $2,830-2,880/mt FOB China, from $2,840-2,880/mt last Thursday and the magnesium diecast alloy prices were also revised to $3,130-3,180/mt FOB China, from $3,140-3,180/mt last week.

Chinese sellers said they had received very few overseas inquiries.

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"I only have a few overseas inquiries for March shipment but nothing done yet. We are still negotiating," said a northwest China-based producer.

A south central China-based trader said: "Despite the removal of the 10% Chinese export tax on magnesium ingot, the European buyers are still somehow unmoved. Perhaps, they still want to take some time to observe the market since the tax removal has only been effected in January and trade is slowing down due to the upcoming Lunar New Year holidays. I expect them to be out in the market, looking to buy after the holiday. Whatever stocks they have on hand would have depleted by then."

This southern central trader heard offers at $2,800-2,850/mt.

China is official closed from February 9 to 15 for the holiday. Some workers have left for their hometowns for the reunion celebrations for the holiday this week.

A Tokyo-based trader, who resells to end-users in the Japanese domestic market, has bought 140 mt at $2,800/mt CFR Japan, loading from Tianjin port for March shipment This Tokyo trader, who heard offers around $2,870/mt CFR Japan last week, admitted that this was probably a one-off deal.

"I managed to get a good discount as the Chinese plant was trying to clear stocks in view of the Lunar New Year holiday. This will be my last purchase till the market returns from the holiday," the Tokyo-based trader added.

The northwestern Chinese producer, who kept his offers at $2,850/mt, said: "$2,800/mt CFR Japan sounds a bit low. Maybe around $2,800/mt on FOB basis is possible from Shaanxi as the production cost is lower in the province."

"I am seeing export offers mostly at $2,800-2,850/mt FOB China," the southern central Chinese trader said.

A north China-based producer, who heard export offers at $2,850-2,900/mt said: "In the near term, magnesium offers will likely to go up as the ferrosilicon price continues to rise."

Ferrosilicon is a raw material for magnesium production.

Chinese domestic prices for 75%-Si ferrosilicon this week were heard at Yuan 6,800-7,200/mt ($1,081-1,145/mt) delivered to Tianjin port, up from Yuan 6,800-7,100/mt a week ago on tight supply in view of strong domestic demand.

Meanwhile, sources said the Chinese domestic spot trade for magnesium was starting to slow down in view the upcoming Lunar New Year holidays.

Chinese domestic prices were around Yuan 16,700-17,100/mt ($/mt) ex-works in Shaanxi this week, compared with Yuan 16,700-16,900/mt the previous week. In Shanxi, most offers were steady around Yuan 17,300/mt ex-works, unchanged from last week.

--Alvin Yee, alvin_yee@platts.com
--Edited by James Leech, james_leech@platts.com

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