Released November 01, 2021 | GALWAY, IRELAND
en
Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Europe is facing a critical shortage of magnesium of an "unprecedented magnitude" that threatens to bring steel production and all associated industries to a halt in the coming months.
A cross-industry group of Europe's leading industry associations in the steel, automotive, construction, aluminium and mining sectors has warned of the catastrophic impact of the current Chinese magnesium supply shortage. Magnesium is a key alloying material and widely used in the metals-producing industry. Europe is expected to run out of magnesium stocks by the end of November, with production shortages, business closures and associated job losses to follow, the group warned.
"With the Chinese Government's effort to curb domestic power consumption, the supply of magnesium originating from China has either been halted or reduced drastically since September 2021, resulting in an international supply crisis of unprecedented magnitude," the group stated. The 12-industry groups have called on the European Union (EU) for immediate action, warning that if the situation is not resolved it "threatens thousands of businesses across Europe, their entire supply chains and the millions of jobs that rely on them."
The EU is almost totally dependent (95%) on China for its magnesium supply needs. The sharp reduction in supply is already having a serious impact on the European aluminium, iron and steel producing--and using--industries, including key end-use sectors such as automotive, construction and packaging. The Chinese supply shortfall has already resulted in record prices and worldwide distortions in the supply. Today's remaining magnesium imports are trading at hugely inflated prices of about US$10,000-$14,000 per metric ton, up from approximately US$2,000 per metric ton earlier this year. The group stated that this is "making it almost impossible for European companies to produce or source magnesium-containing materials at a viable level".
"The magnesium shortage could further disrupt the already stressed aluminium supply chain and pose, together with other current input shortages, a compounded risk for our industry during a crucial time of transformation," explained Secretary General Sigrid de Vries of the European Association of Automotive Suppliers in Brussels (CLEPA). "The automotive suppliers rely on aluminium alloys, which are essential raw materials used throughout the car, and the lower weight also makes it an essential element in our efforts to lower vehicle emissions and increase driving range. We therefore call upon policymakers to help secure magnesium supplies in both the short and long-term."
Europe is also facing some of its worst energy crises in recent months due to gas shortages. Industrial Info has been tracking the recent surge in European energy prices and its negative impact on several industrial sectors including steel and chemicals. For additional information, see September 23, 2021, article--Soaring Gas Prices Hit European Chemicals and Steel Sectors and October 4, 2021, article--Norway's Equinor Ramps up Gas Exports to Help EU Crisis.
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.
A cross-industry group of Europe's leading industry associations in the steel, automotive, construction, aluminium and mining sectors has warned of the catastrophic impact of the current Chinese magnesium supply shortage. Magnesium is a key alloying material and widely used in the metals-producing industry. Europe is expected to run out of magnesium stocks by the end of November, with production shortages, business closures and associated job losses to follow, the group warned.
"With the Chinese Government's effort to curb domestic power consumption, the supply of magnesium originating from China has either been halted or reduced drastically since September 2021, resulting in an international supply crisis of unprecedented magnitude," the group stated. The 12-industry groups have called on the European Union (EU) for immediate action, warning that if the situation is not resolved it "threatens thousands of businesses across Europe, their entire supply chains and the millions of jobs that rely on them."
The EU is almost totally dependent (95%) on China for its magnesium supply needs. The sharp reduction in supply is already having a serious impact on the European aluminium, iron and steel producing--and using--industries, including key end-use sectors such as automotive, construction and packaging. The Chinese supply shortfall has already resulted in record prices and worldwide distortions in the supply. Today's remaining magnesium imports are trading at hugely inflated prices of about US$10,000-$14,000 per metric ton, up from approximately US$2,000 per metric ton earlier this year. The group stated that this is "making it almost impossible for European companies to produce or source magnesium-containing materials at a viable level".
"The magnesium shortage could further disrupt the already stressed aluminium supply chain and pose, together with other current input shortages, a compounded risk for our industry during a crucial time of transformation," explained Secretary General Sigrid de Vries of the European Association of Automotive Suppliers in Brussels (CLEPA). "The automotive suppliers rely on aluminium alloys, which are essential raw materials used throughout the car, and the lower weight also makes it an essential element in our efforts to lower vehicle emissions and increase driving range. We therefore call upon policymakers to help secure magnesium supplies in both the short and long-term."
Europe is also facing some of its worst energy crises in recent months due to gas shortages. Industrial Info has been tracking the recent surge in European energy prices and its negative impact on several industrial sectors including steel and chemicals. For additional information, see September 23, 2021, article--Soaring Gas Prices Hit European Chemicals and Steel Sectors and October 4, 2021, article--Norway's Equinor Ramps up Gas Exports to Help EU Crisis.
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.
