Supply chain woes have dominated headlines throughout the 2021 calendar year, with the ongoing global microchip shortage heavily impacting auto industry production, including for General Motors. Now, there are rumblings that further issues may arise with a magnesium shortage in China.
In a recent report, Financial Times states that the current Chinese magnesium shortage could impact automakers with a wide-sweeping shortage of aluminum. Magnesium is required in aluminum production as an alloying agent, which means if there is a substantial magnesium shortage, aluminum production could stop as a result.
Aluminum is used for a wide variety of automotive components, offering high strength and low weight. Just a few examples of aluminum car components would include wheels, vehicle bodies and frames, engine components, and transmission components.
Now, however, China is in the midst of an energy crises, with rising energy costs that result in increased costs for magnesium production. China provides the majority of industrial magnesium, while a magnesium shortage could precede an aluminum shortage that impacts the auto industry.
According to the Financial Times report, roughly 85 percent of the world’s magnesium production takes place in China. However, some magnesium production also takes place in North America, with one large domestic producer, US Magnesium, offering a small degree of protection from a large Chinese magnesium shortage.
“Aluminium producers North America are also working their scrap supply chains very aggressively to make up for whatever raw magnesium they are not able to source,” said research manager at commodities consultancy CRU, Stephen Williamson, per the Financial Times report.
For the moment, no automakers have issued warnings over the magnesium shortage or how it could impact aluminum production, and as a consequence, automotive production. Nevertheless, European companies are already feeling pressure as Chinese magnesium stockpiles run dry.
“The current magnesium supply shortage is a clear example of the risk the EU is taking by making its domestic economy dependent on Chinese imports,” said European Aluminum in a recent statement.
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Comments
More reasons the US needs to be self sufficient and not rely on the rest of the world.
The rumor is China is cutting coal power plant emissions prior to the winter olympics in order to reduce smog so that their snow is cleaner…
I couldn’t agree with you more.
If we want to be self-sufficient, we also have to be prepared for prices to skyrocket on just about everything.
A major reason why we get a lot of our raw materials from overseas is because we source from countries where labor is incredibly cheap and where companies extracting those materials have no regard for the devastating environmental impact.
I’m not saying I disagree with you, I’m just saying doing it will be costly and affect customers and Americans and the rest of the west have become so accustomed to relatively cheap goods.
That’s why we get the rare earth material for the ev batteries from China. So they tear up there mountains instead of ours.
I’m probably wrong but isn’t the reason most of the rare earth material comes from China is because that’s where it mainly is?
Yes. Rare earth metals are quite abundant in the soil, but it’s very hard to mine for them since they are not found in concentrated deposits like other metals. That means companies have to mine for a more common metal and then sort for rare earth metals later on.
Based on one estimate I’ve seen, China has an estimated 55 million tons of rare earth metals, Brazil has 22 million, and the USA has 1.8 million. Just like oil, though, it should not be surprising if new deposits are later found in the strangest of places.
Thanks for the info.
This is so wrong, as the reason we can’t build here is chinas lobbyist won’t let us. It’s not the price of labor, as China make massive profits even after shipping all the way overseas, it’s cheaper to build over here, but its not possible when the China lobbyist who own Smithfield meats, Foxconn and others makes it a 10 year approval process just to build a factory. The Obama clean water act, thank heavens it was removed, as it made it illegal to technically build a house with a basement, and it was the housing market’s given a blind eye to it that anything was built.
Yeah. We don’t need clean water. Just ask the residents of Flint.
>The Obama clean water act, thank heavens it was removed, as it made it illegal to technically build a house with a basement
Wat.jpg
Nothing says “I’ve been consumed by fake news on Facebook” quite like posting the gubm’t is taking away your basement
Piss off
Wow thanks for your well thought out articulate contribution to the discussion regarding magnesium. Very insightful!
Grow up.
Just when you thought things can’t get worse……oh, they do.
“Cheer up”, he said, “things could be worse”. So, I cheered up, and sure enough, things got worse.
Things are going to do nothing but continue to get worse. It’s not just about where on this planet resources are obtained. It’s about resources on this planet being finite. Opening new mining/acquisition sites in new locations as the existing sites are depleted is only a short term fix. 100 years from now, things going to be much worse.
The human race better start looking up and get back to the space program that was abandoned 40 years ago. We are going to need the resources that are out there.
Why the people in power making the decisions don’t see this, I have no idea.
There is nothing in outer space that is worth going and bringing back.
Lol.
Now gM will be at the mercy of it’s suppliers.
After years of screwing the last penny out of them the tables are turned.
Are people really saying we should be self sufficient when it comes to magnesium? Unlike oil and other resources, this country isn’t loaded with magnesium deposits. We’re 11th in the world with 35,000 thousand metric tons. Russia is #1 with 2,300,000 thousand metric tons (China is #2).