The crisis in magnesium supply also affects the steel industry

Europe may run out of magnesium by the end of this month. Because China will stop its production due to rising energy costs. Magnesium compounds, mainly magnesium oxide, are used as a refractory material for furnaces in the steel industry. Also in the production of cast iron and steel.

Steel production facilities in Europe are facing an „imminent risk” of closure due to a critical shortage in magnesium supplies from China, the construction sector has warned.

As the European Union is almost entirely dependent on China (around 95%) for its magnesium supply needs, European industries producing and using aluminium, iron and steel, together with their raw material suppliers, are particularly affected, and the ramifications of this crisis are manifold, influencing various value chains, including in key sectors such as the automotive industry;  constructions, etc.

A group of 12 European industry bodies has issued an urgent call to action to national governments amid dwindling metal stocks. Being needed to produce key alloys used in construction.

China produces 87% of the world’s magnesium and has a near monopoly in Europe, accounting for about 95% of imports.

Since September, magnesium deliveries have been either stopped or drastically reduced. After China’s decision to close huge parts of its magnesium production units, amid rising energy costs.

European trade bodies, which include the Eurofer Steel Association and the European Metals Association, said the shutdowns had led to an „international supply crisis of unprecedented magnitude”.

Europe is warned that it will run out of magnesium

They warned that they now expect Europe to run out of magnesium stocks by the end of November. Causing „far-reaching ramifications” on supply chains across the continent.

The sectors most at risk are construction, packaging and the automotive industry. They rely on magnesium-containing aluminum alloys for the manufacture of vehicles.

The current shortage has already led to record price increases across the globe. Imports from China have increased fivefold to around £7,300 per tonne. From £1,450 per tonne earlier this year.

These costs have made it almost impossible for European firms to produce or supply magnesium-containing materials at a viable level. Industry bodies warn that further escalation could lead to the closure of some companies.

The group called on the EU Commission and national governments to „urgently work on immediate action with their Chinese counterparts to alleviate the critical shortage problem in the short term. As well as the long-term effects on the supply of European industries”.

German Chancellor Angela Merkel flagged the issue during a summit of EU leaders. While Czech Prime Minister Andrej Babis called the situation „a disaster”.

Beijing has insisted that the shortage will be temporary. And the secretary-general of the Chinese Magnesium Association, Sun Qian, assured German media that the country would not ban magnesium exports.

In 2001, Europe was forced to stop its remaining magnesium production as a result of dumped Chinese imports. About 1.2 million tons of magnesium are produced each year. Europe and North America using about 19% each.

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