Noble wins deal to sell VSMPO-Avisma magnesium

Trading company Noble Group has won a deal to sell magnesium offtake from Russia-based producer VSMPO-Avisma this year, a source at the company told MB.

He was unable to disclose the total volume of the offtake, or the price at which Noble is concluding business.

Avisma produces around 26,000 tpy of pure and alloyed magnesium, which is used in the automotive and telecommunications sectors, according to figures published by the International Magnesium Assn.

VSMPO is Russia’s largest producer of titanium sponge and mill products, used in aerospace parts.

Demand for magnesium is incredibly poor, market participants said, after the automotive sector severely cut production.

But demand for Russian magnesium has been comparatively strong, despite waning interest and a fall in price in the European market, the Noble source said.

“Demand for Russian magnesium has been reasonably solid,” he said. “The market is looking for an alternative supplier to the Chinese producers, which dominate the market.”

“The Chinese have cranked up the price in the past and customers want to keep their options open,” he said.

The price of magnesium in Europe has plummeted to $2,750-2,900 per tn from $4,500 in September.

While no business was reported to MB last week, one trader said the market had weakened further, having lost a sale at $2,600 per tn.

Global magnesium production in 2008 was around 700,000 tn, according to well-informed sources. China was the leading producer at around 550,000 tpy compared with Russia’s 32,000 tpy.