Magnesium Buyers Warn Crunch Threatens Millions of European Jobs
Magnesium Buyers Warn Crunch Threatens Millions of European Jobs
(Bloomberg) -- Europe’s magnesium shortage could shutter industrial operations within weeks, threatening thousands of businesses and millions of jobs in sectors from cars to packaging, associations warned.
Chinese exports of magnesium -- a critical material for hardening aluminum alloys and used in everything from power tools to laptops -- has plunged as the nation cuts output because of an energy crunch. That’s caused prices to spike and left buyers worldwide exposed.
Europe, which buys 95% of its magnesium from China, is expected to run out of the metal by the end of November, a group of industry associations including European Aluminium, Eurometaux and industriAll said on Friday. Production shortages, factory closures and job losses could follow unless reserves are replenished, they said.
The magnesium shortfall is among a growing list of headaches for a wide range of industries that have been hit by record gas and power prices, higher prices of materials such as copper and snarled supply chains.
“Supply of magnesium originating from China has either been halted or reduced drastically since September 2021, resulting in an international supply crisis of unprecedented magnitude,” the group said. It urged governments and the European Commission “to urgently work toward immediate actions with their Chinese counterparties to mitigate the short-term, critical shortage issue, as well as the longer-term supply effects on European industries.”
There have been similarly stark warnings in the U.S., where a leading producer of aluminum billet told customers it may curtail output and ration deliveries as soon as next year due to the shortage. Alcoa Corp., the largest U.S. maker of raw aluminum, has also voiced concerns about magnesium scarcity and has seen some suppliers suspending deliveries.
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