So naturally, given our current track record, we’ve now got an incoming magnesium shortage to chatter about.
Let’s get started.
Visordown states that China has been hit by a massive power crisis, resulting in a dramatic decline in the production of magnesium. Our own motorcycle markets are extremely hungry for this alloy, as it does so much to represent everything lightweight and strong that we want in a motorcycle – and with China responsible for the production of 87% of the world’s magnesium, it’s not just the motorcycle industry about to be affected.
“China began suffering from rolling blackouts in September as a result of an electricity shortage,” explains the China Macro Economy.
“In response, local authorities ordered the country’s biggest magnesium smelters in Yulin, Shaanxi province, to cut power usage. Magnesium production at Yulin’s roughly 50 smelters in Fugu county – which account for about 60 percent of China’s total output – was halved from mid-September, and 15 of those smelters are likely to see a complete halt in production until March, according to industry figures and media reports.”
That equation means that our own markets will see a serious shortage by Q1 of 2022, if not earlier.
“The magnesium shortage will likely hit the auto and aluminum sectors the hardest,” says Mok Yuen Cheng, senior managing editor for non-ferrous metals at commodities analyst S&P Global Platts.
“Europe, Japan, and China have already seen auto output cuts this year due to chip shortages. Now, with the magnesium supply also tight, carmakers are facing higher production costs and further potential output curbs.”
Last week, the German non-ferrous metal industrial association WVM wrote to the German government, saying that “it is expected that the current magnesium inventories in Germany, and respectively in the whole of Europe, will be exhausted by the end of November 2021.”
If you’re thinking this won’t be that crazy, it’s been enough to get the European Automobile Manufacturers Association (EAMA) to issue a warning to its members, with the following cry to affected governments:
‘…our industries jointly call on the European Commission and national governments to urgently work towards 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.’