It has been crises saving lately, also in the car industry. In addition to the chip shortage, there is now a threat of a shortage of a material that the car industry cannot do without: magnesium. Experts take into account quite a doomsday scenario.
The lost car production due to lockdowns has already been completely overshadowed by the effect of the global chip shortage. As a result, the car industry is already largely on hiatus and hordes of people worldwide are waiting a long time for their new car. Just when you think it can’t get any worse, it threatens to go one step further. Industry analysts are in conversation with the Financial Times the alarm about magnesium supplies from China.
Magnesium is essential in the production of aluminum, which in turn is needed on a large scale for building cars. Without magnesium, therefore, no cars. By far the most magnesium for the European car industry comes from China. However, there is an energy crisis and factories are now also temporarily closed. The magnesium industry is also being hit hard by this, and industry analyst Amos Fletcher of research firm Barclays outlines that this could have huge consequences in a short time: “If the supply of magnesium stops, the entire auto industry may be forced to shut down.”
According to Fletcher, this could still happen this year, according to the words of the German association of metal producers, WVM. That warns Reuters. that stocks can quickly dwindle. “Current stocks in Germany and all of Europe will be exhausted by the end of November.” Only 15 of the 50 magnesium factories in China are now said to be operational, even at half power. If it stays that way long enough, it may become even quieter in the car factories. WVM: “With a bottleneck of such proportions in the supply, there is a threat of huge production loss in all sectors in the aluminum chain, such as the car industry (…).”
– Thanks for information from Autoweek.nl