Why experts predict global magnesium metal production can increase 15-fold
The major challenge to widespread adoption of magnesium metal as a standard industrial metal is the limited, inconsistent availability of large quantities of high-quality magnesium products at predictable prices. The pricing is confounded as China dominates global production and runs an opaque pricing model.
On the current spot dealer market, with many mines, magnesium types and customers, prices fluctuate from week to week. Some mines and metal suppliers withhold supplies anticipating higher prices; some plants cannot meet demanding environmental standards and shut down.
Accentuating the supply risk is the primary source country is under immense pressure to close its environmentally damaging Pidgeon plants, which account for 87% of global magnesium metal production. This layers a further and real risk into the supply chain coupled with experiences such as the worlds primary source shuttering for months – without notice – all magnesium plants in the lead up to the Beijing 2008 Olympics to improve air quality.
Additionally, layers of dealers, local and international shippers, brokers, insurers, tariffs and taxes, warehouses and distributors and shifting currency exchange rates add expense and unpredictability to the global magnesium market.
In this shifting landscape, potential magnesium buyers — engineers and production managers from the automotive, aerospace, construction, energy, and pharmaceutical industries — often hold back on large, long-term commitments to magnesium. Though they recognize the many benefits of magnesium, they cannot take the risk of inconsistent supplies and pricing in their long, complex supply chains and fast-moving assembly lines.
Many of the world’s primary manufacturers remain critically exposed to magnesium metal supply disruption, as do the thousands of downstream fabricators they supply. Secure magnesium metal supply with net zero emissions is a required component part of the global journey.
The Biden Administration is actively looking for ways to reignite the industry sector, releasing a recent policy trial balloon looking to import more metals from Canada, Australia, and Brazil. Moving the US away from being a primary mining source toward using international sources for primary metals and producing value-add products is based in solid labour economics and informed by the potential environmental upside of increasing accessibility to lighter and less polluting vehicles.