UK construction projects could find themselves short of vital materials including steel after warnings of a European-wide shortage of magnesium could impact the production.
Major European trade bodies have warned that supply issues from China since September mean that the continent could face an acute shortage of magnesium, which is a key component of the production of certain types of steel as well as many metal alloys.
A cross-industry group of metal producing and using industries including the European Steel Association Eurofer said: “Magnesium is a key alloying material and widely used in the metals producing industry. Without urgent action by the European Union, this issue, if not resolved, threatens thousands of businesses across Europe, their entire supply chains and the millions of jobs that rely on them."
Magnesium is used in small quantities as a reagent in the production of high quality structural steel. Import costs have risen from around $2,000 per metric tonne to between $10,000 - $14,000 making it “almost impossible for European companies to produce or source magnesium-containing materials at a viable level”.
According to figures produced by the Department for Business, Energy and Industrial Strategy the costs of fabricated stainless steel has jumped by almost 75% in the twelve months to August 2020.
Due to the Chinese Government’s effort to curb domestic power consumption, supply of magnesium originating from China has either been halted or reduced drastically since September 2021, resulting in an international supply crisis which the trade bodies have stated is “of unprecedented magnitude".
Europe is expected to run out of magnesium stocks by the end of next month.
The joint statement added: “With the European Union almost totally dependent on China (at 95%) for its magnesium supply needs, the European aluminium, iron and steel producing and using industries together with their raw materials suppliers are particularly impacted, with far-reaching ramifications on entire European Union value chains, including key end-use sectors such as automotive, construction and packaging.
“To that effect, our industries jointly call on the EU Commission and national governments to urgently work towards immediate actions with their Chinese counterparties to mitigate the short-term, critical shortage issue.”