Metal Search

Site Search

LOG IN

If you don’t see what you are looking for please reach out to us directly at metalsales@industrialmetalservice.com

How a Magnesium Shortage is Affecting Aluminum Production

Magnesium has a remarkable mix of mechanical and biomedical properties that are ideal for use in the automobile, aeronautical, and medical industries. It bonds easily with other materials, which, while making it difficult to find magnesium in its purest form, creates alloys with highly desirable properties. For example, magnalium, an aluminum alloy mixed with a small amount of magnesium, has a perfect combination of lightness and strength.

Though a majority of production industries only need small amounts of magnesium, they can not function without it. However, in September 2021, the price of magnesium reached an all-time high of $11,470 per ton. An energy crisis in China has dramatically reduced the global magnesium supply by up to 50-60 percent, with an impending aluminum shortage in the future. Fortunately, industries already have a better alternative to deal with this global magnesium shortage.

Below, we detail the role of magnesium in aluminum production, the causes of the current magnesium shortage, and why aluminum recycling is a great way for manufacturers to remain in operation until the supply chain disruptions are resolved.

The Role of Magnesium in Aluminum Production

To increase the strength of aluminum alloys without impacting their ductility, small amounts of magnesium are added, resulting in alloys with high strain hardening capacities known as the 5xxx series. These alloys are most commonly produced as sheets and plates that are used in cryogenic pressure vessels, recreational boats, armored vehicles, and trains.

When silicon is added to 5xxx series alloys, it results in medium- to high-strength, heat-treatable aluminum alloys known as the 6xxx series. Given their high corrosion resistance and good welding performance, 6xxx series aluminum alloys are extensively used for architectural projects, automotive decorative parts, aircraft engine parts, and handrails.

Causes of the Global Magnesium Shortage

China is the largest producer of magnesium globally and accounts for nearly 87 percent of the global supply, with 54 percent from Yulin, located in Shaanxi province, alone. Europe and North America use around 19 percent of that production to meet their various industrial requirements and more than 40 percent for aluminum alloying.

However, soaring coal costs and a ban on coal imported from Australia have driven China into a power crunch. Reported coal inventories and power plants have been producing below-average results since February 2021. China’s government has started power rationing throughout the country to strike a balance. The country’s power cuts have hit thousands of homes and industries in 17 provinces, including Shaanxi. This crisis is expected to continue, as the demand for coal and natural gas surges during the winter.

In the event of this supply bottleneck, 35 out of 50 magnesium production plants in Shaanxi have been shut down under the country’s new environmental policy to meet the carbon emission targets for 2021. The remaining plants have been ordered to cut production by half. As a result, the prices of magnesium have been breaking records in the world market since March, although there was no impact in the United States until May. If the situation persists, it is expected that the current magnesium reserves in Europe and Germany will be exhausted by the end of 2021.

 

Top-Grade Aluminum for Every Purpose and Industry

New Aluminum Plate 6061

New Aluminum Rectangular Bar

All Aluminum Shapes

New Aluminum Plate 6061 New Aluminum Rectangular Bar All Aluminum Shapes
Customizable thickness: Measure in inches. You can get various options for all industry applications.

Can be cut to specific shapes and sizes: Excellent weldability to cater to unique project needs.

Corrosion resistance: Grades like 6061-T651 are perfect for marine hardware applications that require superior rust resistance.

Environmental resilience: Due to its heat treatable nature, 6061 aluminum does well in extreme conditions.

Wide selection of sizes and dimensions: Choose your sizes based on tensile strength, width, and weight.

Good machinability: It’s lightweight and high strength makes it flexible for a number of applications.

Reliable supply: Consistent, certified aluminum stock you can trust.

High-quality material: Superior-grade aluminum for precision needs.

Custom cuts: Accurate cuts down to thousandths of an inch.

 

Effects of the Global Magnesium Shortage

China’s power rationing is expected to cause a short supply of 28,000 tons of magnesium this year, as most plants will run at 40 percent capacity until the end of 2021. The price has decreased by two-fifths from a record-high in September, but it is still triple the pre-pandemic price level. Though no shortage of aluminum has yet been reported, if those mandated production cuts are not soon relaxed in the next few months, a material shortage is likely to occur.

The higher price could incentivize new sources of magnesium production outside China, but this could take a while. On the other hand, though industries may consider reducing the magnesium content in their products to some extent, it may likely hamper the end quality as well as some unique performance characteristics of aluminum and its alloys.

Aluminum Recycling as a Solution

Aluminum Recycling as a Solution

The United States Geological Survey (USGS) recently published a Mineral Industry Surveys report for the second quarter of 2021. It shows that despite major disruptions to the import supply chain, there was a 5 percent decrease in the spot prices for magnesium imports as compared to the first quarter because of abundant supplies of secondary magnesium favored by secondary aluminum producers. In this regard, there is a capacity to recycle and use remnant aluminum until the supply chain is restored to its normal level.

We Recycle and Supply Aluminum Locally and Nationally

Metal scraps and remnants remaining from production processes are often too small for further use by larger manufacturers but are fine for use by smaller machine shops and fabricators. Purchasing recycled aluminum remnants can be a great way to mitigate the potential effects of the current magnesium shortage, and it provides valuable savings as compared to purchasing new metal straight from the mill.

At Industrial Metal Service, we specialize in recycling and supplying remnant metals such as aluminum, steel, copper, and titanium. We have more than two decades of experience working with machine shops, fabricators, and manufacturers in the San Francisco Bay Area and nationally.

Whether you need a one-time special order or would like to customize a recycling schedule for your shop, we’ll make it easy for you to work with us. Contact us today to discuss your metal requirements.

Contact Us

Published by IMS Team

Industrial Metal Service has decades of experience and over 1.1 billion pounds of metal sold and recycled. Our founder, Jeff, has spent his life in the industry and prides himself on offering fair, efficient, trustworthy, knowledgeable, outstanding customer service. We offer metal salesmetal recycling pickup service, and other associated services, such as precise metal sawing, machinery teardown, and warehouse cleanupGive us a call and we’ll get it done.