No magnesium, no cars

A shortage of microchips has disrupted car production, but now a new threat looms over the world automotive industry. This is a magnesium deficiency that began due to China’s energy crisis. This is where 90% of the magnesium comes from. Energy supply problems are caused by a jump in coal prices and negatively affect not only the growth of China’s own economy, but can weaken the global economy, which has already suffered from the consequences of the COVID-19 pandemic, which will ultimately lead to increased inflation around the world.

Magnesium is an essential metal for the production of a number of automotive components. An alloy of magnesium and aluminum is used in making fuel tanks, seat frames and light alloy wheels. The PRC government has already been forced to shut down 35 of its 50 magnesium factories, and the consequences of such actions will soon affect car factories around the world. Difficulties will last at least until the end of the year. There has already been a sharp jump in metal prices: since mid-September 2021, the cost of magnesium has been 40-45 thousand yuan ($6207- $6983) per ton, which is 36% more than a month earlier. In October and November, prices are likely to rise even more. The shortage of microchips and magnesium will cause the automotive industry to suffer for at least the beginning of next year.