Eric Onstad

LONDON (Reuters), – European industry associations said Friday that the European Commission needs to start talks with China about resuming magnesium shipments to address severe shortages. It also must avoid shutdowns of plants which could threaten millions of people.

China provides 95% of the EU’s magnesium demand, which is a crucial ingredient in steel and aluminium, however, supplies have dried up from September according to a statement.

According to a joint statement from a dozen industry associations, metal producers and auto suppliers, “Avoiding urgent action by Europe Union, this problem, if it is not resolved, threatens thousands… of European businesses and their entire supply chains and the million of jobs that depend on them,” the declaration said.

They added that Europe will run out magnesium stock by November end.

China’s attempts to reduce power consumption has had a negative impact on the production of many metals including magnesium which is widely used in aerospace.

The prices of magnesium in China has risen more than twice to $4,700 a tonne. This is the highest price since 2008.

According to the statement, Europe’s remaining stocks sell for anywhere from $10,000 to $14,000 per tonne.

Eurometaux, the European Association of Metals said in a separate email that the magnesium shortage must be addressed in the same international forum as the shortage of semiconductors.

Eurometaux suggested that Europe might consider whether to restart its domestic magnesium production in the long-term, after it was closed by China’s low prices in 2000.