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Roskill: Magnesium Compounds Industry Turned Around by China Supply Disruptions in 2018

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News provided by

Roskill Information Services

10 Sep, 2018, 11:50 GMT

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LONDON, September 10, 2018 /PRNewswire/ --

Robust Chinese government anti-pollution measures reaching out across the country's mining industry from early 2017 and into 2018 prompted the closure of many magnesia calcination and fusion plants. This led to a sudden reduction in supply and concern over the future of China's magnesium compounds supply chain.

     (Logo: https://mma.prnewswire.com/media/656466/Roskill_Logo.jpg )

China has dominated world magnesia supply for decades, accounting for 70% of world magnesia production capacity and 60% of world production.

Production in China is focused in Liaoning province. The main magnesia-producing region within Liaoning province is then split between two hubs: Dashiqiao in Yingkou and Haicheng in Anshan. Dashiqiao has less magnesite resources but more processing companies, while Haicheng has larger magnesite resources and primary mining companies. Mining of magnesite and production of magnesia in both regions have been affected severely by a combination of very limited provision of explosives for mining and environmental inspections by the government, leading to plant closures.

By early 2018, supply shortages had become severe. As well as the issue of plant closures due to environmental inspections, government control of explosives interrupted magnesite ore extraction and thus feedstock to caustic calcined (CCM), dead burned (DBM), and fused (FM) magnesia plants. Ore shortages were exacerbated by a ban on illegal magnesite mining in Haicheng.

China's 13th Five-Year Plan (2016-2020) sets clear objectives for a more environmentally friendly China. For the first time, eight obligatory environmental quality targets were included in the plan. These targets will direct the future of mining and processing in China for most of the ten-year forecast period for this new edition of the Roskill market report on Magnesium Compounds.

President Xi Jinping is focused on pollution control as well as economic growth for his second term, with implications for the global supply chain in magnesium compounds as well as many other industrial raw materials. Magnesia prices in China in Q2 2017 tripled over those seen in Q1 2017 and stayed at US$630-740/t for 97.5% MgO, lump DBM, FOB China into the Chinese New Year in February 2018. By 1 August 2018, the price of DBM 97.5% MgO, lump, was being reported at US$1,100-1,350/t FOB China.

Supply tightness affecting magnesia markets is expected to persist for the foreseeable future. High-quality magnesia prices remain firm on a lack of raw materials as the Chinese government continues to exert strict controls on mining.

Roskill's new Magnesium Compounds: Global Industry, Markets & Outlook report, which is now in its 13th edition, has just been published with 10-year price, supply and demand forecasts. For more information visit: https://roskill.com/market-report/magnesium-compounds/

Roskill will be presenting at IMFORMED's China Refractory & Abrasive Minerals Forum 2018, Regal International East Asia Hotel, Shanghai, 10-12 September 2018. Email Alison Saxby (Alison@roskill.com) to arrange a meeting.

Roskill will also be presenting and exhibiting at the International Colloquium on Refractories 2018, taking place September 26 and 27 at EUROGRESS, Aachen in Germany. Meet George Coles (george@roskill.com) at Stand 26 or email Alison Saxby (alison@roskill.com) to discuss the magnesium compounds market with Roskill.

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