European metals industry could face disruptions, industry association says
German and European industry faces disruption from tight global supplies of magnesium, the country’s association of metals producers WirtschaftsVereinigung Metalle (WVM) says.
Reuters reports that, in a letter to the German government, the WVM explains that the European magnesium stocks are running down and shortages are in sight because of lack of supplies from China.
‘It is expected that the current magnesium inventories in Germany and respectively in the whole of Europe will be exhausted by the end of November 2021,’ the letter reads.
It is reported that China, Europe’s main magnesium supplier, has been cutting output to conserve power supplies.
High power prices in China and Europe have hit producers of metals including aluminium, silicon and zinc, causing a sharp rise in prices and tighter global supplies.
The WVM says there’s needs to be further action to improve the ‘toolbox’ of the European Commission against the drastic rise in energy prices, as effective measures for energy-intensive industries are not being taken.
Franziska Erdle, Managing Director of WVM says, ‘The current high energy prices are a massive problem for the energy-intensive industry and also affect companies in the non-ferrous metal industry to a large extent.
‘The non-ferrous metal industry is currently in a particularly precarious situation: energy prices and raw material supply bottlenecks, such as magnesium, have a firm stranglehold on the industry. Both have a significant impact on the commodity market. In some European companies, production is reduced by up to 50 percent due to energy prices. There is even a threat of complete production stops. The resulting shortage in turn affects commodity prices on the stock market, which are also skyrocketing.’