Much has been made of the semiconductor shortage that’s crippled the motoring industry over the last 12 months or so, but things could soon get even worse.
Along with rumours of a potential tyre shortage coming down the pipe, there’s now hefty speculation that a shortage of magnesium is going to cause “catastrophic impact” in production lines around the world.
A statement released late last week by an assortment of different European groups urged the European Union (EU) to work with China, where the shortage is imminent, in order to prevent “risk of Europe-wide production shutdowns”.
“Without urgent action by the European Union, this issue, if not resolved, threatens thousands of businesses across Europe, their entire supply chains and the millions of jobs that rely on them,” said the letter.
“Our industries jointly call on the EU Commission and national governments to urgently work towards immediate actions with their Chinese counter-parties to mitigate the short-term, critical shortage issue as well as the longer-term supply effects on European industries.”
China is the world’s leading producer of magnesium, with reports claiming it makes as much as 87 per cent of the world’s supply. It’s unclear exactly how much its output is set to drop, but Chinese media reports that export output could fall by 10 per cent in 2021. It’s reported elsewhere that Europe’s magnesium stockpiles could end as soon as next month.
The concern about shortages stems from a spate of factory closures caused by the Chinese government’s crackdown on domestic power usage as local power prices skyrocket. It’s reported that 25 magnesium-producing hubs have had to shut down.
“Between 2000 and 2021, China’s magnesium production increased from 12 per cent of the global supply to 87 per cent, creating an effective international monopoly on a 1.2 million tonnes per annum market demand,” says the European Aluminium group’s latest report.
“The magnesium sector is only one in a long list of production leakages since the early 1990s. European primary aluminium production alone has lost more than 30 per cent of its capacity since 2008. In parallel, China continuously increased production capacity to meet the steady increase in European and global demand for both aluminium and magnesium.”
Magnesium has plenty of uses in today’s cars. These include in wheels, gearboxes, steering column housings, air bag housings, seat frames, and much more.