Magnesium Shortages in China Could Create Added Headaches for Global Automakers

While the global semiconductor shortage continues to decimate the auto manufacturing industry, markets have begun to divert their attention to magnesium, which is on the brink of a supply crisis that threatens to further weaken the world’s car manufacturers.

Magnesium, which is put in aluminum to create a hardened aluminum alloy, is used to make various vehicle parts such as rims, engine blocks, transmissions, body panels, and frames. However, according to a Bank of America note, low magnesium supplies could spark an aluminum shortage, which could inflict further damage on the already-struggling auto industry.

China’s concurrent coal and energy shortages have sparked widespread power outages across the country’s industrial regions, which is incidentally where energy-intensive smelters that produce magnesium are located. To make matters worse, China also holds a monopoly on the world’s magnesium production, and since there aren’t any substitutes for the metal in aluminum sheet production, the supply could essentially become frozen.

To put such potential implications into focus, nearly 85% of the entire global magnesium supply is derived from China, and more specifically, in the town of Yulin, which is located in the Shaanxi province. The current global energy crisis has forced the Chinese government to cut back magnesium smelters’ output by 70% in an effort to preserve energy supplies ahead of the winter season.

The money question is whether or not the Chinese government will greenlight the resumption of magnesium smelters before the end of the year. If not, then the global automotive industry will face a critical inflection point, one that is fuelled by a double crisis of semiconductor and aluminum shortages.


Information for this briefing was found via the BofA. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

2026 Could Be Gold’s Biggest Year Yet!? | Ryan King – Equinox Gold

Gold Is Screaming Higher While Currencies Burn | Simon Ridgway – Rackla Metals

We Have the Highest-Grade Antimony Deposit in North America!? | Jim Atkinson -Antimony Resources

Recommended

Canadian Copper Secures $8 Million Lead Order From Ocean Partners As Part Of Larger Funding Round

Northern Superior Expands Philibert With 350 Metre Step Out Testing 1.10 g/t Gold Over 25.5 Metres

Related News

Washington Prepares to Impose 200% Tariff on Russian Aluminum This Week

With the one-year anniversary of Russia’s military operation in Ukraine soon approaching, the US is...

Monday, February 6, 2023, 01:40:00 PM

Major Aluminum Investment Signals Confidence Despite US-Canada Trade Dispute

A Rio Tinto-backed aluminum company will commit $1.1 billion toward facility modernization in Quebec as...

Thursday, July 3, 2025, 10:14:00 AM

Trump Tariffs After Tariffs: 25% On Steel And Aluminum On Top Of Initial 25% Generic Dues

A White House official confirmed that new 25% tariffs on steel and aluminum will be...

Wednesday, February 12, 2025, 12:07:00 PM

More Trump Tariffs Coming: 25% On Steel And Aluminum

Tariffs are back after President Donald Trump announced that he will apply a 25% levy...

Monday, February 10, 2025, 03:50:00 PM

Trump Plans To Impose Tariffs On Copper, Steel, Aluminum: What Could The Fallout Be?

The trade war is about to become more intense as the Trump administration eyes imposing...

Tuesday, January 28, 2025, 02:12:00 PM