Magnesium is an important element widely used in aluminum alloys. Adding magnesium can make the pieces stronger and lighter. Therefore, magnesium alloy is also used to make many auto and motorcycle parts, whether it is gearbox or engine, more or less magnesium needs to be added.
However, the European Automobile Manufacturers Association has issued a warning recently, is it? Ando that the global automobile, motorcycle and aircraft manufacturing industry will face the magnesium shortage crisis next year? Or (2022). At that time, the production lines of the industries may not be able to produce goods, which will seriously affect the supply chain and the end consumer market.
Among the countries that store magnesium in the world, the main ones are Russia, China, South Korea, Brazil and Australia. Among them, China has become the leader in the extraction and production of this precious metal. In fact, 95% of the magnesium on the European market is supplied by China.
However, from September of this year, China began to face the problems of insufficient power supply and power shortage. Therefore, the local government directed Fugu County, a major magnesium-producing city, to reduce energy consumption. About 50 local smelters (accounting for about 60% of China’s total production) began halving magnesium production since mid-September, with 15 of them halting full production until March next year.
Since almost (95%) of them are completely dependent on China for magnesium supply, European industries and their raw material suppliers that produce and use aluminum, iron and steel have to face the problem of magnesium shortage, which It also means that the major brands will face problems. such as the lack of materials to produce products or the increase in product prices. The KTM group has publicly reported that this year’s business growth rate will be lower than anticipated. The Indian giant Bajaj is also under pressure due to a magnesium shortage.
China is the largest industrial manufacturing country in the world. It occupies an important production position in many industries, such as daily necessities, electronic products, car and motorcycle parts, etc. But at the same time, many production resources are also highly dependent on international imports. Novel coronavirus pneumonia and other major industrial exporters in India and Vietnam were forced to reduce production and large-scale production due to novel corona pneumonia. Prevention and control of the epidemic in China were excellent and the impact was minimal. From 2020 to the first half of 2021, China’s exports increased significantly. But as COVID-19 hits the world, some countries that have resource pricing power have increased their prices substantially, and the prices of important production resources such as coal, iron, copper and magnesium have fluctuated. violently. By the second half of 2021, China had to limit production and raise prices, so the supply of the entire world market fell under severe impact.