Friday, 15 October 2021
Information for business partners
Currently, the supply chain of Magnesium (Mg), an integral alloying element for several aluminium alloy series, is facing disruptions on a global scale leading to shortage.
This global shortage has been caused mainly by production stoppages following the application of higher environmental standards to the magnesium production in China (restrictions on energy consumption and CO2 emissions). China is the world’s largest source of the magnesium alloying element, representing 80% or more of the global Mg production. EU aluminium rolling industry, including ELVAL, relies heavily on Chinese magnesium supplies.
The above situation poses serious challenges to the global aluminium rolling industry in terms of shortages and sharply higher prices for Magnesium (Mg), which could result in detrimental effects for the global aluminium supply chains. It is unclear when the situation will normalise again. Other raw materials and alloying elements will be impacted as well (if not already) by these restrictions.
ELVAL is doing its utmost to secure alternative sources of supply so as to minimize the impact to its operations. We are monitoring the situation closely and we will be keeping you informed.
Elval, Aluminium Rolling Division of ElvalHalcor S.A.
The “dual control of energy consumption” policy implemented by the Chinese government in south China from September has had a certain impact on the production of some manufacturing companies.
From October, Henan Province mills will also have to “run for 3 days and stop for 4 days”. During the 3 days, production can only run 12 hours each day. As a result of the restrictions, production capacity has been sharply reduced.
Based on the current situation now, prices will need to be reassessed. The delivery of open orders will be delayed because of the limited production capacity. We will keep you posted if there are any further developments.