Berlin / London — Recovering from a global chip shortage European automakers have recently rushed to assure shareholders that magnesium shortages are not currently a risk to their production plans.
But auto parts suppliers and industry groups say automakers could face a significant shortage of materials if production in China, which accounts for 85% of the world’s magnesium supply, doesn’t accelerate quickly. I’m warning you.
Automakers usually don’t buy large quantities of magnesium. However, component manufacturers that supply key components to automakers rely heavily on magnesium. Magnesium can be used alone or in combination with aluminum to reduce the weight of the car.
Lightening the vehicle is especially helpful in increasing the mileage of electric vehicles, which is important for European energy conversion programs.
Due to a shortage of chips, the delivery date for new cars has already been extended to one year.
Car companies Stellantis and BMW say there are no pressing issues with supply. Others in this sector have stated that in-flight inventories and magnesium can be seen until early 2022.
However, the purchase manager at Volkswagen’s earnings announcement said a shortage was expected.
“It is unpredictable at this time whether the planned magnesium deficiency will outweigh the semiconductor deficiency,” said Volkswagen’s Murat Axel.
China has allowed some magnesium producers to resume production, but not enough to significantly mitigate the shortage. Prices have fallen from record highs, but are still more than double the January levels.
“We are very concerned that this will have an impact in the coming weeks,” Jonathan O’Riodan, head of the European Automobile Manufacturers Association ACEA, told Reuters.
Germany’s ZF, which uses magnesium for gearboxes and steering wheels, told Reuters that it is looking for new sources of magnesium from other countries, but given its large market share, China’s supply. Offsetting the loss was limited.
“It’s calm before the storm,” said Teresa Schad, spokesman for WV Metalle, the German Metals Association.
By Victoria Waldersee and Pratima Desai