Reports related to this article:
Project(s): View 1 related project in PECWeb
Plant(s): View 1 related plant in PECWeb
Released October 26, 2021 | SUGAR LAND
en
Researched by Industrial Info Resources (Sugar Land, Texas)--The price of magnesium has skyrocketed this year, mainly driven by production curtailments in China.
According to the Financial Times, "Around 85% of the world's magnesium production comes from China, and a large chunk of it from one town in Shaanxi province, Yulin. About a month ago, the local government ordered roughly 35 of its 50 magnesium smelters to close until the end of the year and told the rest to cut production by 50% in order to hit energy consumption targets." China has been cutting back electricity usage in energy-intensive industries amidst an energy shortage, and also is cutting back on emissions leading up the Winter Olympic games, which will be held in Beijing in February 2022.
The magnesium shortage affects countries that heavily rely on magnesium from China, especially in the European Union. The U.S. has one major primary magnesium producer, US Magnesium LLC (Salt Lake City, Utah), which operates an electrolytic process plant in Utah that recovers magnesium from brines from the Great Salt Lake. Magnesium is also sourced from a number of secondary smelters in the U.S.
While it was not clear which U.S. producer was being referring to, in a recent third-quarter earnings report, Kaiser Aluminum (NASDAQ:KALU) (Lake Forest, California) Chief Executive Officer Keith Harvey said, "The recent force majeure declaration from one of the domestic magnesium suppliers due to an equipment failure and worsening industry supply issues with production from China, together could further impact our fourth-quarter results. We are working with our suppliers to better understand the situation as well as discussing with our customers, potential supply and cost implications associated with these interruptions for the balance of the quarter and potentially beyond the quarter."
Kaiser is a leading North American producer of aluminum products.
The magnesium supply shortage highlights the importance of the development of primary and secondary magnesium metals supply outside of China. There are currently nearly 70 magnesium metal projects under development worldwide, totaling $9 billion in total investment value, according to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database. Only 15 of those projects, totaling $2.5 billion, are for primary metal production and another five projects are secondary magnesium metal production, while the remaining projects are downstream rolling, processing, foundries and forging operations. China accounts for more than half of the projects, with the U.S. and Canada being the second- and third-largest countries for magnesium metal projects. There are six projects in Europe including Germany, Norway, Spain and Switzerland. In Germany, coal-mining energy giant RWE Power AG is investigating utilizing Latrobe Magnesium technology to produce 30,000 tons per year of magnesium from waste-coal fly ash.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a list of detailed project reports.
Click on the image at right for a graph showing magnesium project spending by country.
Already in a tizzy due to shortages of semiconductors, the automotive industry is watching the magnesium situation closely, as it is highly dependent on aluminum sheet and cast parts, for which magnesium is an important alloying metal. In addition to automotive sheet, magnesium metal also is used in armored plate and can body stock.
The use of magnesium is increasing, especially in automotive parts and sheet production, as automakers look to reduce the weight of vehicles in order to make them more fuel efficient and less carbon intensive.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
According to the Financial Times, "Around 85% of the world's magnesium production comes from China, and a large chunk of it from one town in Shaanxi province, Yulin. About a month ago, the local government ordered roughly 35 of its 50 magnesium smelters to close until the end of the year and told the rest to cut production by 50% in order to hit energy consumption targets." China has been cutting back electricity usage in energy-intensive industries amidst an energy shortage, and also is cutting back on emissions leading up the Winter Olympic games, which will be held in Beijing in February 2022.
The magnesium shortage affects countries that heavily rely on magnesium from China, especially in the European Union. The U.S. has one major primary magnesium producer, US Magnesium LLC (Salt Lake City, Utah), which operates an electrolytic process plant in Utah that recovers magnesium from brines from the Great Salt Lake. Magnesium is also sourced from a number of secondary smelters in the U.S.
While it was not clear which U.S. producer was being referring to, in a recent third-quarter earnings report, Kaiser Aluminum (NASDAQ:KALU) (Lake Forest, California) Chief Executive Officer Keith Harvey said, "The recent force majeure declaration from one of the domestic magnesium suppliers due to an equipment failure and worsening industry supply issues with production from China, together could further impact our fourth-quarter results. We are working with our suppliers to better understand the situation as well as discussing with our customers, potential supply and cost implications associated with these interruptions for the balance of the quarter and potentially beyond the quarter."
Kaiser is a leading North American producer of aluminum products.
The magnesium supply shortage highlights the importance of the development of primary and secondary magnesium metals supply outside of China. There are currently nearly 70 magnesium metal projects under development worldwide, totaling $9 billion in total investment value, according to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database. Only 15 of those projects, totaling $2.5 billion, are for primary metal production and another five projects are secondary magnesium metal production, while the remaining projects are downstream rolling, processing, foundries and forging operations. China accounts for more than half of the projects, with the U.S. and Canada being the second- and third-largest countries for magnesium metal projects. There are six projects in Europe including Germany, Norway, Spain and Switzerland. In Germany, coal-mining energy giant RWE Power AG is investigating utilizing Latrobe Magnesium technology to produce 30,000 tons per year of magnesium from waste-coal fly ash.
Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for a list of detailed project reports.
Already in a tizzy due to shortages of semiconductors, the automotive industry is watching the magnesium situation closely, as it is highly dependent on aluminum sheet and cast parts, for which magnesium is an important alloying metal. In addition to automotive sheet, magnesium metal also is used in armored plate and can body stock.
The use of magnesium is increasing, especially in automotive parts and sheet production, as automakers look to reduce the weight of vehicles in order to make them more fuel efficient and less carbon intensive.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
