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The world’s largest carmakers and other users of aluminium could be forced to halt production within weeks amid a “catastrophic” shortage of magnesium across Europe.
Magnesium is a key material used in the production of aluminium alloys, which are used in everything from car parts to building materials and food packaging.
China has a near-monopoly on global magnesium manufacturing, accounting for 87 per cent of production, but the Chinese government’s efforts to reduce domestic power consumption amid rising energy prices have slowed output to a trickle since September 20.
In Shaanxi and Shanxi provinces, the world’s main magnesium production hubs, 25 plants had to shut down and five further plants slashed production by 50 per cent as a result of the power cuts.
Europe is expected to run out of magnesium stockpiles by the end of November.
On Friday, a group of 12 European industry associations representing cars, metals, packaging and other sectors issued a joint statement warning of the “catastrophic impact” of the production cuts, which they said had already resulted in an “international supply crisis of unprecedented magnitude”.
The statement called for urgent action from the EU Commission and national governments to work with China to stave off the “imminent risk of Europe-wide production shutdowns”…
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