Magnesium Prices in China Fall After Resumption of Production at Key Enterprises
BEIJING (Sputnik) - Magnesium prices in China have fallen after leading enterprises in Shaanxi province in central China resumed their production at the beginning of the month.
As a result, magnesium production in Yulin City, which includes Fugu County, fell by almost 40% in annual terms.
In this regard, magnesium prices increased, while metal supplies decreased. As for September 17, the factory price of magnesium of Xintian Magnesium Alloy was reportedly 45,000 yuan ($7,034) per ton. On September 22, the price soared to 65,000 yuan. On October 28, the price returned to 43,000 yuan per ton.
Caixin reported that the stabilization of magnesium prices was also caused by the decrease in coal and ferrosilicon prices.
According to the China Nonferrous Metals Industry Association, in 2020, the country produced 858,300 tonnes of magnesium.
Magnesium mining in China had ballooned over the past decades, making it one of the key suppliers of the metal to the global market. In 2020, Chinese exports of magnesium products exceeded 5 million tonnes.
Magnesium alloy is widely used in the aviation and automotive industries and in the production of electric appliances. It is also regarded as an environmentally friendly engineering material.
In October, a number of European industry associations informed the EU authorities about severe shortages of magnesium. The EU is expected to run out of stocks by the end of November. As a source in the European Commission told Sputnik, the authorities are in contact with China to address the problem.
In September, the Chinese government faced shortages of coal and electricity in several regions of the country. According to business news outlet Caixin, plants in Fugu County, Shaanxi Province, which produced about 50% (478,600 tonnes) of China's magnesium last year, suspended their production between September 20-30 at the behest of authorities amid a coal shortage.