{"id":1149985,"date":"2021-12-24T10:20:05","date_gmt":"2021-12-24T15:20:05","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1149985"},"modified":"2021-12-24T10:20:07","modified_gmt":"2021-12-24T15:20:07","slug":"china-limits-magnesium-production-causing-supply-chain-constraints","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/china-limits-magnesium-production-causing-supply-chain-constraints\/","title":{"rendered":"China Limits Magnesium Production, Causing Supply Chain Constraints"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Fchina-limits-magnesium-production-causing-supply-chain-constraints%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=1149985&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><p class=\"subheading\">China, the world\u2019s top producer of magnesium, has severely limited production of the metal hardener \u2014 used across the aluminum industries \u2014 since September, throwing global supply chains into disarray and threatening to further disrupt worldwide trade through 2022.<\/p>\n<p>\u201cAround 85 percent of the world\u2019s magnesium production comes from China, and a large chunk of it from one town in Shaanxi province, Yulin,\u201d the <em>Financial Times<\/em> <a href=\"https:\/\/www.ft.com\/content\/1611e936-08a5-4654-987e-664f50133a4b\">reported<\/a> on October 19.<\/p>\n<figure id=\"D-ROS-B1\" class=\"a8d\"><\/figure>\n<figure id=\"M-ROS-B1\" class=\"a8d\"><\/figure>\n<figure id=\"gmxrevmore\" class=\"H\"><\/figure>\n<p>In mid-September, local Communist Party officials in Shaanxi ordered roughly 35 of the province\u2019s 50&nbsp;magnesium smelters to close until the end of the year and directed the rest of Shaanxi\u2019s&nbsp;magnesium smelters to cut production in half through the same time period. The province was forced to mandate the curbs after China\u2019s federal government <a href=\"https:\/\/www.breitbart.com\/asia\/2021\/11\/08\/chinese-state-grid-warns-of-power-shortages-until-spring-2022\/\">limited<\/a> energy rations to factories nationwide. China has <a href=\"https:\/\/www.breitbart.com\/asia\/2021\/09\/28\/china-power-shortage-several-apple-tesla-suppliers-halt-production\/\">suffered<\/a> from an acute shortage of coal \u2014 its primary source of fuel for electricity production \u2014 that simultaneously caused prices of the commodity to surge over the past year, <a href=\"https:\/\/www.cnbc.com\/2021\/10\/13\/china-coal-prices-hit-record-high-as-floods-add-to-supply-constraints.html\">creating<\/a> a power crisis.<\/p>\n<div id=\"attachment_19230314\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/12\/GettyImages-1237358386.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-19230314\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/12\/GettyImages-1237358386.jpg\" alt=\"This photo taken on November 15, 2021 shows the coal-powered Datang International Zhangjiakou Power Station in Zhangjiakou, one of the host cities for the 2022 Winter Olympic Games, in China&#039;s northern Hebei province. - China is the world&#039;s biggest producer of wind turbines and solar panels, and the Winter Olympics is seen as an opportunity to showcase the countrys green technologies as they seek global markets. - TO GO WITH China-rights-environment-energy,FEATURE by Poornima WEERASEKARA (Photo by GREG BAKER \/ AFP) \/ TO GO WITH China-rights-environment-energy,FEATURE by Poornima WEERASEKARA (Photo by GREG BAKER\/AFP via Getty Images)\" width=\"600\" height=\"450\" \/><\/a><\/p>\n<p class=\"wp-caption-text\"><em>This photo taken on November 15, 2021 shows the coal-powered Datang International Zhangjiakou Power Station in Zhangjiakou, one of the host cities for the 2022 Winter Olympic Games, in China\u2019s northern Hebei province. (GREG BAKER\/AFP via Getty Images)<\/em><\/p>\n<\/div>\n<p>\u201cFlooding across China\u2019s key coal producing provinces, resurgent demand for Chinese goods in the wake of pandemic easing, conflicting CCP [Chinese Communist Party] energy policies, and extreme market distortions, including power rationing and price controls, have all contributed to the energy shortage,\u201d&nbsp;<em>Forbes<\/em>&nbsp;<a href=\"https:\/\/www.forbes.com\/sites\/arielcohen\/2021\/10\/19\/chinas-energy-crisis-deepens-with-potentially-fatal-consequences\/?sh=4ced9c391163\">observed<\/a> on October 19.<\/p>\n<figure id=\"M-ROS-B2\" class=\"a8d\"><\/figure>\n<p>Magnesium production requires vast amounts of electricity. In China, about 4 kg of coal is required to produce 1 kg of magnesium. The raw material is used most commonly in the production of aluminum alloys, which are in turn used in the manufacture of automobile and aircraft parts, laptops, smartphones, and other products.<\/p>\n<p>\u201c[M]agnesium is used in small amounts to add strength to aluminium alloys, which are then used in building supplies and packaging,\u201d according to the <em>Economist<\/em>.<\/p>\n<p>The magazine&nbsp;<a href=\"https:\/\/www.economist.com\/the-economist-explains\/2021\/11\/15\/why-it-matters-that-magnesium-is-in-short-supply\">noted<\/a> in mid-November that China\u2019s power shortages had caused the country to limit magnesium production. The development threatens to further constrain global supply chains, already hampered by myriad shortages across industrial fields due to the ongoing pandemic.<\/p>\n<p>\u201cThe price of the metal, which in recent years has hovered around $2,000 per tonne, peaked at more than $11,000 in September,\u201d the <em>Economist<\/em> observed.<\/p>\n<p>\u201cThe price of magnesium had come down to $5,300 by November 13th, but some manufacturers are jittery. On a recent earnings call Volkswagen\u2019s head of purchasing said a magnesium shortage \u2018will happen definitely,&#8217;\u201d the publication reported on November 15.<\/p>\n<figure id=\"M-ROS-B3\" class=\"a8d adSo\"><\/figure>\n[embedded content]\n<p>Canada-based Matalco, one of America\u2019s largest aluminum producers, <a href=\"https:\/\/www.spglobal.com\/platts\/en\/market-insights\/videos\/market-movers-americas\/122021-us-hrc-coal-isone-gas-power-prices\">told<\/a> its clients in mid-October magnesium availability had \u201cdried up\u201d in recent weeks and warned the phenomenon might force the company to ration deliveries in 2022.<\/p>\n<figure id=\"D-ROS-B2\" class=\"a8d\"><\/figure>\n<p>\u201cIn the last several weeks, magnesium availability has dried up, and we have not been able to purchase our required magnesium units for all of 2022,\u201d Matalco Inc. President Tom Horter said in a letter issued October 13.<\/p>\n<p>\u201cThe purpose of this note is to provide this advanced warning that, if the scarcity continues, and especially if it becomes worse, Matalco may need to curtail production in 2022, resulting in allocations to our customers,\u201d the letter, obtained and published by the research firm S&amp;P Global Platts Analytics, read.<\/p>\n<p>\u201cEurope is expected to run out of magnesium stocks by the end of November,\u201d European Aluminum, a Brussels-based industry body, <a href=\"https:\/\/www.european-aluminium.eu\/media\/3285\/2021-10-22-cross-industry-statement_magnesium-supply-crisis-in-europe_final.pdf\">predicted<\/a> on October 22.<\/p>\n<figure id=\"M-ROS-B4\" class=\"a8d adSo\"><\/figure>\n<p>\u201cWith an 87 percent production share, China has a near-total monopoly on global magnesium manufacturing,\u201d European Aluminum acknowledged in a separate <a href=\"https:\/\/european-aluminium.eu\/media\/3237\/2021-09-27-position-paper_impact-of-imminent-shortage-of-mg-supply-from-china-on-eu-aluminium-production.pdf\">notice<\/a> issued on September 27.<\/p>\n<p>\u201cIn 2001, Europe was forced to close its remaining magnesium production as a consequence of dumped Chinese imports, and now depends for 95 percent on China\u2019s supply,\u201d the industry representative recalled.<\/p>\n<p>European Aluminum said the world\u2019s current magnesium supply shortage represents \u201ca clear example of the risk the EU [European Union] is taking by making its domestic economy dependent on Chinese imports.\u201d<\/p>\n<div id=\"attachment_19230298\" class=\"wp-caption aligncenter\"><a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/12\/GettyImages-481677975.jpg\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-19230298\" src=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-content\/uploads\/2021\/12\/GettyImages-481677975.jpg\" alt=\"EU Council President Herman Van Rompuy (R) welcomes Chinese President Xi Jinping (L) on March 31, 2014 2013 for a working session at the EU Headquarters in Brussels. Xi Jinping began on March 30 a state visit to Belgium, punctuated by a historic visit to the EU, at the conclusion of his European tour marked by harvest commercial contracts. AFP PHOTO GEORGES GOBET (Photo credit should read GEORGES GOBET\/AFP via Getty Images)\" width=\"600\" height=\"450\" \/><\/a><\/p>\n<p class=\"wp-caption-text\"><em>EU Council President Herman Van Rompuy (R) welcomes Chinese President Xi Jinping (L) on March 31, 2014, for a working session at the EU Headquarters in Brussels. (GEORGES GOBET\/AFP via Getty Images)<\/em><\/p>\n<\/div>\n<p>Japan\u2019s government-owned broadcaster, NHK, published an <a href=\"https:\/\/www3.nhk.or.jp\/nhkworld\/en\/news\/backstories\/1838\/\">article<\/a> on December 14 revealing Tokyo has joined the E.U. in reconsidering its reliance on China for magnesium imports.<\/p>\n<p>\u201cThe situation has countries like Japan \u2013 which imports 99 percent of its magnesium from China \u2013 reassessing its reliance on foreign suppliers,\u201d according to the public broadcaster.<\/p>\n<p>\u201cThe Japanese government is looking for solutions to resolve its dependency on overseas-sourced commodities. A new economic security bill that aims to make supply chains more resilient is expected to be submitted to the Diet [Japanese parliament] next year,\u201d NHK reported.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>China, the world\u2019s top producer of magnesium, has severely limited production of the metal hardener \u2014 used across the aluminum industries \u2014 since September, throwing global supply chains into disarray &#8230;<\/p>\n","protected":false},"author":37,"featured_media":2315279,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"","fifu_image_alt":"","footnotes":""},"categories":[],"tags":[],"class_list":["post-1149985","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry"],"_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1149985","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/37"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=1149985"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/1149985\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2315279"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=1149985"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=1149985"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=1149985"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}