Tue. Dec 7th, 2021

It would not have been a problem if Beijing had not recently ordered about 35 of its 50 magnesium melts to close until the end of the year to save power. That means current European stocks will be depleted by the end of November, Germany’s association of metal producers WVM warned on Tuesday.

Magnesium is used in a number of products, especially aluminum alloys, which are used in several car parts from gearboxes and steering column to seat frames and fuel tank caps.

German Chancellor Angela Merkel and Czech Prime Minister Andrej Babi┼í, leaders of the continent’s leading carmakers – raised the issue during an EU summit on Thursday. The European Commission followed suit in opening a dialogue with China.

“We are raising this issue with our Chinese colleagues to address immediate shortcomings and are considering long-term solutions to tackle this strategic dependency,” a Commission spokesman acknowledged in an email to Reuters.

As the metal is difficult to store – it begins to oxidize after three months – global inventories could run critically low before the end of the year if Beijing does not restart production in the next few weeks.

“This problem, if left unchecked, threatens thousands of businesses across Europe, their entire supply chains and the millions of jobs that depend on them,” a dozen industry groups, including metallurgists, car suppliers and the packaging sector, said in a joint statement on Friday. .

“The consequences would be catastrophic,” they said.

Record prices

Sub-bidding has pushed prices to record highs, currently trading at $ 4,700 per share. Ton. That is more than double the price early this year and the highest since 2008.

In Europe, the remaining stocks go for $ 10,000- $ 14,000 per. Ton, up from $ 2,000 per. Tons earlier in the year, industry groups said.

The problem has already reached North America. Canada’s Matalco Inc., which produces aluminum tickets, told its customers last week that magnesium availability had “dried up” and if scarcity continued, it would have to limit production and rational deliveries as quickly as next year.

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