25 October 2021 – The EU industry is deeply concerned about an emerging shortage of magnesium. Magnesium prices have skyrocketed since September 2021. According to industry associations, Europe will run out of magnesium by the end of November – if nothing happens. A home-grown crisis, as the EU relies 95% on cheap imports from China. Metal values on the LME, such as nickel, aluminium, zinc and lead, rose again on Monday morning. And stainless steel in Europe more expensive due to shortages.
Magnesium – EU industry concerned about shortage
The European metals industry is concerned about a possible shortage of the extremely important raw material magnesium. It is mainly used in the automotive, aerospace and electronics industries. Especially as an alloying agent in aluminium. According to industry associations such as European Aluminium and Eurofer, European of the light metal stocks will only last until the end of November.
Magnesium availability drastically reduced since September 2021
Already at the beginning of September 2021, magnesium prices in China had started to rise almost rocket-like after the Chinese government had enacted environmental protection measures and energy savings.
EU consumers buy 95% of their magnesium in China
EU industry consumers say they rely almost 95% on magnesium produced in China. 88% of the world’s magnesium, which is the fourth most abundant element on earth but is not found in pure form and always in combination with other elements, is produced in China.
EU authorities seek solution – but what kind?
EU authorities have responded to industry concerns and entered into negotiations with the Chinese government to find a solution to the magnesium crisis. Whether this will lead to success, however, especially because of the critical attacks by EU parliamentarians on China in recent months, is not yet clear. The Chinese energy shortage has changed little so far.
Nickel and aluminium on the LME up again
After starting somewhat lower on the SHFE, the ups and downs of the last week are consolidating there again. However, aluminium (approx. +1.7%) and nickel (+1.17%) started positively on the LME on Monday. Zinc and lead have also risen.
Fed without teeth
After the Fed once again announced nothing new last Friday and also lacked an outlook on possible measures, the market hardly reacted to Fed Chairman Powell’s statement. Those who shout “Wolves! wolves!” too often, at some point people stop attaching any importance to them.
European Stainless Steel Shortage Drives Prices
Stainless steel prices in Europe rose again last week. The continuing shortage on the market shows no sign of abating. Delivery times for European stainless steel have now reached at least May 2022. In addition, import supplies into the EU are currently limited.
“If you have any questions about stainless steel supply chains and sourcing, please feel free to contact us,” said Thorsten Gerber, CEO of Gerber Group today.
- Stainless Espresso: Nickel rally 2021 – What happened?
- Stainless Espresso: China announces possible action on coal prices
- Stainless Espresso: Peak in commodity supercycle not yet reached
We at the Gerber Group have been trading in stainless steel worldwide for over 20 years. We are your experts when it comes to purchasing, import, logistics and services. Information is a vital part of this. Because only then can you and we make the right decisions. Do you have any questions? Contact us now.
Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.