More than 10 European business associations representing auto, metals, packaging and other industries warned of an “imminent risk of a production shutdown in Europe” at the end of November due to depletion of magnesium reserves, according to a joint statement, issued by the associations.
“Europe is expected to run out of magnesium by the end of November, resulting in production stops, plant closures and further job losses. If the European Union does not take urgent action on this issue and if it is not resolved, then it puts a threat to thousands of enterprises across Europe, their entire supply chains and the millions of jobs that depend on them, ”the statement said.
The shortage of magnesium has arisen due to the shutdown of manufacturing plants in China in order to save electricity. China supplies 87% of the world's magnesium and about 95% to Europe, and 35 of the 50 smelters are currently closed.
Magnesium prices in Europe have increased many times over and at the moment the metal is being sold "at extortionate prices," the statement said. Today magnesium is sold at a price of US$10,000 to US$14,000 per ton, compared to US$2,000 prior to the shortage.
“To this end, our industries are jointly calling on the EU Commission and national governments to urgently take immediate action with their Chinese counterparts to mitigate short-term, critical shortages as well as long-term supply prospects for European industries,” the statement said.
The European Commission told the UK Financial Times that the authorities are aware of the situation.
“We are raising this issue with our Chinese colleagues in order to solve the deficit problem, and we are evaluating long-term solutions to eliminate this strategic dependence,” the European Commission said.
By: Eugene Gerden