Global Manufacturers Face Magnesium Supply Shortage

The world’s largest carmakers are facing a potentially crippling shortage of aluminum across Europe as China, the biggest manufacturer of the metal’s key component, struggles to keep its factories running amid a power crisis.

Magnesium is an important raw material in the production of aluminum alloys used in virtually everything—from cars to product packaging.

China has a near monopoly in the global magnesium market. Power rationing across the country due to energy shortages have either slowed down or shut down completely its industrial hubs.

The world’s main magnesium production hubs in Shaanxi and Shanxi provinces has seen 25 factories shut down and the remaining plants slash half of their production.

European industry groups warned in a statement that the shortage will create a “catastrophic impact” and empty Europe’s magnesium stockpile by November. The European Union imports about 95 percent of its magnesium needs from China.

Meanwhile, China’s state-run tabloid Global Times wrote that “it is unrealistic to expect China to fully meet the urgent needs of the European market.”

“China’s efforts to tackle these challenges at its own pace are responsible and should be respected,” the tabloid said in an editorial on Oct. 25, adding that the EU must establish a trade mechanism on its supply chain with China to address the issue.

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