“If the supply of magnesium is cut off, the entire auto industry will potentially be forced to shut down,” said one expert.
One energy The crisis in China, which has included closing factories to save electricity, has led to a shortage of magnesium production from the country which supplies 85% of the world’s supply which is used to make many essential car parts. handjob according to jalopnik.
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Magnesium is used in many aluminum alloys that are used to manufacture body panels, fuel tanks, brackets, brakes, axles and many other components of automobiles.
In addition to the magnesium shortage in China, Europe’s magnesium reserves are expected to dry up in November.
“It is expected that the current magnesium inventories in Germany and across Europe, respectively, will be exhausted by the end of November 2021,” WVM, the Association of Metal Producers of Germany, said this week.
“With a supply bottleneck of this proportion, the entire aluminum value-addition chain in sectors such as automobiles, aircraft, electro-cycles, construction, packaging industries and engineering is at risk of large-scale production losses,” the association said.
Barclays analyst Amos Fletcher warned that “if magnesium supplies run out, the entire auto industry will potentially be forced to shut down.”
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The magnesium crisis comes amid an already short supply of cars due to a computer chip shortage due to factory closures.
Shortfalls and insanely high prices for both new and used vehicles began last year with the explosion of the pandemic, when several states issued stay-at-home orders. Prices fell and automakers closed factories for eight weeks. The resulting drop in supply came as many co-consumers wanted a new or used vehicle to commute to work or to travel on the road without coming into contact with others.
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While auto plants were closed in April and May last year, computer chip makers shifted production to meet wild demand for laptops, gaming devices and tablets. This created a shortage of automotive-grade chips, a problem that may not be fully resolved until next year.
The Associated Press contributed to this report