The German metals industry, through the WV Metalle association, has sounded the alarm about a supply crisis similar to the one that has occurred with chips. They estimate that magnesium stocks could run out by the end of November.
Magnesium is mainly used in the manufacture of aluminum alloys, which is why industries that depend on this metal are particularly concerned about the possible disruption of the supply chain.
Why is this happening?
China is currently suffering from an energy crisis, a fact that also affects other energy-intensive industries or companies, which is why magnesium production is particularly affected. According to various sources, it can be assumed that so far at least 31 magnesium plants in the world’s most important magnesium production centres, Shaanxi and Shanxi provinces, have closed down or have had to reduce their production by 50%.
Today, China has a near monopoly of the world’s magnesium production with a production share of 87%. About 45% of all Chinese exports go to Europe. Europe is also particularly affected by supply bottlenecks, as the remaining magnesium production was abandoned in 2001 for various reasons and has been on the EU’s critical raw materials list since 2017.
As a result, Chinese exports now cover 95% of European magnesium demand, creating almost total dependency.