Manufacturing and logistic:
“Chinese magnesium shortage: Global car industry to grind to a halt within weeks amid ‘catastrophic’ halt” [New Zealand Herald (dk)].
“The world’s largest carmakers and other users of aluminium could be forced to halt production within weeks amid a ‘catastrophic’ shortage of magnesium across Europe. Magnesium is a key material used in the production of aluminium alloys, which are used in everything from car parts to building materials and food packaging. China has a near-monopoly on global magnesium manufacturing, accounting for 87 per cent of production, but the Chinese government’s efforts to reduce domestic power consumption amid rising energy prices have slowed output to a trickle since September 20. In Shaanxi and Shanxi provinces, the world’s main magnesium production hubs, 25 plants had to shut down and five further plants slashed production by 50 per cent as a result of the power cuts Europe is expected to run out of magnesium stockpiles by the end of November. On Friday, a group of European industry associations representing cars, metals, packaging and other sectors issued a joint statement warning of the ‘catastrophic impact’ of the production cuts, which they said had already resulted in an ‘international supply crisis of unprecedented magnitude’. The statement called for urgent action from the EU Commission and national governments to work with China to stave off the ‘imminent risk of Europe-wide production shutdowns.'”
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Mr Horter promised another update within weeks but warned "in the meantime, you may want to consider letting your customer base know of this silicon and magnesium availability crisis and also let them know that other products or inputs needed for making billet or slab may also reach a crisis point".
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... the current crisis was a "clear example of the risk the EU is taking by making its domestic economy dependent on Chinese imports".
Europe has grown almost entirely dependent on China for magnesium since Chinese dumping forced the closure of Europe's remaining magnesium production plant in 2001.
"Between 2000 and 2021, China's magnesium production increased from 12 per cent of the global supply to 87 per cent, creating an effective international monopoly on a 1.2 million tonnes per annum market demand," European Aluminium's report said.
"The magnesium sector is only one in a long list of production leakages since the early 1990s.
"European primary aluminium production alone has lost more than 30 per cent of its capacity since 2008. In parallel, China continuously increased production capacity to meet the steady increase in European and global demand for both aluminium and magnesium."
European manufacturers now face "dramatic risks" as China is expected to direct its remaining magnesium production to its own industries, with European companies no longer receiving the necessary raw materials to continue production.
