Well. That was a close call.
When we received news of the Chinese power crisis back in Q4 of 2021, we weren’t quite sure the industry’s magnesium supply would remain steady going into 2022. After all, with China responsible for production of roughly 87% of the world’s magnesium, a power crisis would spell disaster for supply chains of more than a few countries – and with the previous report stating that Germany was already bracing to feel the effects of the crisis, we anticipated shortages and delays out the wazoo.
The German non-ferrous metal industrial association WVM even 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.”
Thanks to the gathered efforts of magnesium manufacturers nearly doubling exports as soon as restrictions lifted, Reuters tells us we’re in the clear, with China’s figures rebounding to a 19-month high as of late Q4 and Europe breathing an especially gusty sigh of relief (they would have felt the effects before we did).
“The country exported 36,160 tonnes of high-purity unwrought magnesium in November , Chinese customs data showed, compared with 24,329 tonnes in October [of the same year] and 18,829 tonnes [a year back] in November 2020,” comments the report.
Magnesium plays a key role in the Powersports industry, with part manufacturers heavily reliant on the ore, to strengthen aluminum or simply be used as a standalone material for key components of cars and motorcycles.
Today, Magnesium prices are back to around $8,800 per tonne. Compared to the all-time high of $16,250 per tonne in October, things are looking up – now if only our damaged supply chains will continue on the rise for 2022.
Fingers crossed, toss in your bit below, be sure to subscribe to our newsletter, and as always – stay safe on the twisties.
*Media sourced from Car Advice, ZeroHedge, PIM, and LM*