Magnesium crisis to hit car production ‘soon’

  03 November 2021

China has halted production of magnesium due to concerns over excessive energy use, which experts say could soon hit car production. China is responsible for 87% of the world’s magnesium production (and virtually all of Europe’s magnesium), vital in making both aluminium and high-strength steel. European stocks of magnesium are predicted to run out by the end of November.

Car production, already hit by the semiconductor shortage, could “grind to a halt within weeks” as a result. “Such a scenario is not yet included in our estimates,” BofA Securities analysts said last week. “The issue has just emerged and no carmaker has yet warned about it.”

Europe’s ACEA has issued an urgent call for action against the imminent risk of EU-wide production shutdowns. The association wants the European Commission and national governments to “urgently work towards immediate actions with their Chinese counterparts”.

The issue, if not resolved, “threatens thousands of business across Europe, their entire supply chains and the millions of jobs that rely on them”.

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