European industry associations warn of catastrophic impact of China’s magnesium supply shortage

Raw materials European industry associations warn of catastrophic impact of China’s magnesium supply shortage

Editor: Nicole Kareta

The European industry associations European Aluminum, Eurofer, ACEA, Eurometaux, industriAll Europe, ECCA, ESTAL, IMA, EUWA, EuroAlliages, CLEPA and Metals Packaging Europe today launched an urgent call for action against the imminent risk of shutdowns production on a European scale as a consequence of a critical shortage of magnesium supply from China.

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China’s current supply deficit has already resulted in record prices and global supply chain distortions.

Magnesium is a key alloy material and widely used in the metallurgical industry. Without urgent action from the European Union, this problem, if left unresolved, threatens thousands of businesses across Europe, their entire supply chains and the millions of jobs that create them. depend.

Due to efforts by the Chinese government to reduce domestic electricity consumption, the supply of magnesium from China has either been interrupted or significantly reduced since September 2021, resulting in a international supply crisis of unprecedented scale. As the European Union is almost totally dependent on China (95%) for its magnesium supply needs, the European industries producing and using aluminum, iron and steel as well as their raw material suppliers are particularly affected, with far-reaching ramifications throughout the European Union. value chains, including major end-use sectors such as automotive, construction and packaging.

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China’s current supply deficit has already resulted in record prices and global supply chain distortions. Today’s remaining magnesium imports are trading at exorbitant prices of around USD 10,000-14,000 / mt, down from around USD 2,000 / mt earlier this year, making it nearly impossible for European companies to produce or source materials containing magnesium at a sustainable price. level. 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.

To this end, European industries jointly call on the European Commission and national governments to urgently work on immediate actions with their Chinese counterparts to alleviate the critical short-term problem as well as the longer-term supply effects. on European industries.

(ID: 47762265)

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