UK could face steel supply crisis due to EU-wide magnesium shortage

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Construction projects in the UK could run out of vital materials, including steel, after warnings of a Europe-wide magnesium shortage could impact production.

Major European trade bodies have warned that China’s supply problems since September mean the mainland could face a severe shortage of magnesium, which is a key component in the production of certain types of steel as well as many metal alloys.

A cross-sectoral group of metal producing and using industries, including the European Steel Association Eurofer, said: “Magnesium is a key alloy material and widely used in the metal production industry. Without urgent action from the European Union, this problem, if left unresolved, threatens thousands of businesses across Europe, their entire supply chains and the millions of jobs that create them. depend. “

Magnesium is used in small amounts as a reagent in the production of high quality structural steel. Import costs have dropped from around $ 2,000 per metric tonne to between $ 10,000 and $ 14,000, making it “almost impossible for European companies to produce or source materials containing magnesium at such a level. viable ”.

According to figures produced by the Department for Business, Energy and Industrial Strategy, manufacturing costs for stainless steel jumped nearly 75% in the twelve months to August 2020.

Due to the efforts of the Chinese government to reduce domestic electricity consumption, the supply of magnesium from China has either been interrupted or significantly reduced since September 2021, leading to an international supply crisis which, according to the reports. commercial organizations, is “on an unprecedented scale.”

Europe is expected to run out of magnesium stocks by the end of next month.

The joint statement added: “The European Union being almost totally dependent on China (95%) for its magnesium supply needs, the European industries producing and using aluminum, iron and steel as well as their Raw material suppliers are particularly affected, having ramifications across all of the European Union’s value chains, including major end-use sectors such as automotive, construction and packaging.

“To this end, our industries jointly call on the European Commission and national governments to urgently work on immediate actions with their Chinese counterparts to alleviate the critical shortage problem in the short term. “

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