Generic Hero BannerGeneric Hero Banner
Latest Market News

EU magnesium prices surge by 80pc on China cuts

  • Spanish Market: Metals
  • 24/09/21

European magnesium prices surged by 80pc yesterday amid supply cuts in China and depleted European stocks, leaving key end-users in the aluminium and titanium sponge industries grappling with rapidly escalating costs and uncertain production outlooks.

The European market was assessed yesterday at $9,000-10,300/t duty unpaid in Rotterdam, up by 80pc from $5,300-5,400/t on 21 September. To put these hikes in greater context, European magnesium prices have spent recent years at around $2,200-2,700/t du Rotterdam, before breaching the $3,000/t mark in May this year.

European traders and consumers have received highly speculative offers this week, but few were considered reliable and underpinned by readily-available prompt material. One trader received an offer at $15,000/t, but was told the supplier was reliant on a trader in China for the material. A secondary aluminium producer received an offer at $11,000/t, but the offer was withdrawn when they returned to give feedback on the price. One trader offered some existing stock in Rotterdam at $9,000/t but then had to withdraw the offer to divert the material towards a long-term contract customer that suffered shipment cancellations. A trader in France did manage to sell 2t at $10,000/t.

"I have nothing available. If I wanted to profit from these price increases I would have to cancel contracts, sell my stock and hope the profits cover the legal charges after. I could charge $15,000/t in Rotterdam, but I couldn't guarantee delivery even at that price," a western European magnesium trader said.

Most traders have severely depleted stocks in Europe for two reasons. When prices rose above $3,500/t du Rotterdam in late-June, most consumers and importers were reluctant to commit to fresh imports from China, lest prices collapse in the following months. Furthermore, magnesium is difficult to store and has a limited shelf life — it starts oxidising after around three months. Any inventory stored in Europe before the price rally began will have already been used or started oxidising by now, leaving the market extremely tight.

Reliance on China punishes EU consumers

Several large primary and secondary aluminium producers and titanium sponge producers let down by their Chinese suppliers have dipped into the market regularly in recent days.

"There's no way anyone will want to rely on China anymore. This is a cataclysmic event. Freight is less to Europe than the US, so hopefully we'll see some switching at Israeli and Russian producers towards supplying Europe rather than the US," a UK buyer said.

Local governments in China have imposed extreme energy consumption restrictions on some key magnesium-producing areas. The government of production hub Fugu county, in Yulin City, ordered 35 producers to close by 22 September. Other production regions including Shanxi, Ningxia, Inner-Mongolia and Xinjiang also face potential disruption in order to hit their energy targets. It is unclear whether the measures will end in October at the start of a new quarter.

Ripple effect as magnesium impacts other metals

The sharp rise in magnesium prices is being felt in other corners of the metal industry, and the physical shortage of material is set to further compound the impact.

Titanium sponge producers have expressed concern about their production going forward. Magnesium is a key raw material for titanium sponge producers in Ukraine, Kazakhstan and Japan. "This magnesium factor is quite critical to sponge producers. A lot of them buy metallic magnesium to reduce to sponge. I imagine we may see some large disruptions to sponge production in Ukraine and Kazakhstan," one sponge trader in Russia said. Producing 1t of sponge typically consumes 1.2-1.5t of magnesium metal.

The impact is already being felt in China. The country produced 11,200t of titanium sponge in August, down by 1,200t or 9.67pc from July when it produced 12,400t, according to Argus data.

Secondary aluminium producers, uncomfortable but willing to absorb price rises, may find their production impeded by a lack of available material in Europe. Surging silicon and energy prices are also increasing costs for European producers. Typical die-casting alloys only contain 0.3-0.5pc magnesium, but it is an essential ingredient. They also contain 9-12pc silicon, a large chunk of the raw material cost.

"Secondary aluminium alloy is going to be a rough world for the rest of the year," a central European smelter said.

Prices for DIN 226 aluminium alloy were assessed at €2,150-2,200/mt on 23 September, up from €1,880-1,930/mt on 1 July when magnesium prices started to accelerate.

Global magnesium prices surging

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

06/05/25

Trump unlikely to lift tariffs on Canada

Trump unlikely to lift tariffs on Canada

Washington, 6 May (Argus) — President Donald Trump suggested today he would not lift tariffs on imports from Canada and told Canadian prime minister Mark Carney that the US-Canada-Mexico (USMCA) free trade agreement needs to be renegotiated. Trump, who hosted Carney at the White House today, told reporters that there was nothing Canada's leader could tell him to change his mind on stiff tariffs he imposed on Canadian steel, aluminum, cars and auto parts. "It's just the way it is," Trump said. While Trump has altered his tariff levels repeatedly, his administration has imposed a 25pc tariff on Canada-sourced steel and aluminum, and a 25pc tariff on some cars and autoparts imported from Canada. Any product that qualifies for duty-free treatment under the USMCA is exempt from tariffs Trump imposed. The 10pc tariff Trump imposed on Canadian crude and other energy imports only lasted from 4-7 March, causing turmoil in North American energy markets. But even the remaining tariffs are a significant hindrance for the integrated North American auto industry, executives in Canada and the US have said. Trump today described the USMCA, which he negotiated during his first administration, as merely a "transitional deal" and suggested that it could be either terminated or renegotiated completely. The USMCA includes a provision calling for it to be reviewed by all three countries in 2026. The existing free trade agreement is "a basis for broader negotiations," Carney said, adding that "some things about it are going to have to change." Carney made his first trip to Washington just a week after winning the 28 April parliamentary election, following a campaign centered around his opposition to Trump's policies. Trump and Carney offered polite compliments to each other, but there was little visible chemistry between the two men. Trump doubled down on his suggestion that Canada could become the 51st US state, prompting Carney to tell him that "as you know from real estate, there are some places that are never for sale." "Having met with the owners of Canada over the course of the campaign in the last several months, it's not for sale," Carney said. "Never say never", Trump retorted. Trump also repeated his past claims that "we don't do much business with Canada. From our standpoint, they do a lot of business with us." "We are the largest client of the United States," said Carney. "We have a tremendous auto sector between the two of us." By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

US vehicle sales slip in April from 4-year high


05/05/25
05/05/25

US vehicle sales slip in April from 4-year high

Houston, 5 May (Argus) — Domestic sales of light vehicles in April slipped from a four-year high the prior month but still reflected robust purchasing ahead of planned implementation of more US tariffs on the automotive industry. Sales of light vehicles — trucks and cars — dipped to a seasonally adjusted rate of 17.3mn units in April, down from 17.8mn in March, the Bureau of Economic Analysis reported today. Last month's total still was above April 2024's annualized rate of 16mn and was the second-highest monthly reading since April 2021. US consumers maintained steady purchasing last month in a rush to beat 25pc tariffs on imports of vehicle parts that were set to be implemented on 3 May. Those higher duties are expected to raise input costs for domestic automakers, and thus, prices for buyers. US president Donald Trump early last week signed an order that allows vehicle manufacturers to partially recoup tariff-related costs, helping to ease the burden. Still, Trump maintained his goal of forcing US automakers to become wholly reliant on auto parts made in the US. Trump already instituted 25pc tariffs on imports of foreign-made vehicles on 3 April. Tariff-related pressures have dented US consumer sentiment and weighed on domestic manufacturing activity, but certain pockets of the economy have shown resilience such as the services industry and employment. Truck sales last month fell by 1.9pc sequentially to 14.4mn unit rate, while car sales dropped by 8.8pc to a 2.9mn unit rate. Domestic vehicle production fell to a seasonally adjusted annual rate of 10.07mn from an upwardly revised 10.09mn in February, according to US Federal Reserve data. That compares with 11.08mn in March 2024. Auto assemblies are reported with a one-month lag to sales. By Alex Nicoll Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Ford expects $1.5bn tariff hit in 2025


05/05/25
05/05/25

Ford expects $1.5bn tariff hit in 2025

Pittsburgh, 5 May (Argus) — Ford expects tariffs to cost the US automaker about $1.5bn in profit this year, causing the firm to withdraw its full-year financial guidance today. Tariffs and the uncertain rollout of potential changes to those tariff caused the Dearborn, Michigan-based company to suspend its 2025 guidance, which was initially projected at $7bn-8.5bn in earnings before interest and taxes. US president Donald Trump has place 25pc import taxes on vehicles, steel and aluminum, placing immense pressure on US automakers, many of whom have operations in Mexico and Canada. Ford is the third major US automaker to rescind its financial guidance in the past week following similar decisions by Stellantis and General Motors . By James Marshall Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexico's manufacturing contraction deepens in April


05/05/25
05/05/25

Mexico's manufacturing contraction deepens in April

Mexico City, 5 May (Argus) — Activity in Mexico's manufacturing sector shrank for a 13th straight month in April, with declines accelerating in production and new orders, according to a survey of purchasing managers. The manufacturing purchasing managers' index (PMI) fell to 45.5 in April from 46.9 in March, finance executives' association IMEF said, moving further below the 50-point threshold that separates growth from contraction. US tariffs imposed since March are adding pressure to Mexico's manufacturing sector, which makes up about a fifth of the national economy. The auto industry, responsible for roughly 18pc of manufacturing GDP, may be the hardest hit by the new measures, including a 25pc tariff on auto parts that took effect 3 May. Mexico remains the top exporter of vehicles to the US, supplying 23pc of all US auto imports in 2024. But IMEF said tariffs compound broader, mostly domestic headwinds, including reduced public spending and investor uncertainty stemming from sweeping legal and regulatory reforms. New investment has stalled since late 2024. The PMI index for new orders fell by 2.5 points to 41.8, the lowest since June 2020. Production dropped by 2.5 points to 43.6, while employment fell by 0.6 point to 46.4. New orders and production have now been in contraction for 14 straight months, and employment for 15. Inventories saw the steepest drop in April, falling 4 points to 46.3 — sliding from expansion to contraction — as manufacturers accelerated shipments after tariff implementation dates were confirmed. IMEF's non-manufacturing PMI — which covers services and commerce — remained in contraction for a fifth consecutive month but edged up by 0.5 points to 49.0 in April. Within that index, new orders rose by 0.6 points to 48.1, employment increased 1.3 points to 48.6 and production held steady at 47.5. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia's Labor win may aid low-carbon Fe, Al sectors


05/05/25
05/05/25

Australia's Labor win may aid low-carbon Fe, Al sectors

Sydney, 5 May (Argus) — The Australian Labor party's victory in the country's 3 May parliamentary election could support low-carbon iron and aluminium developers, providing policy clarity and public capital to the sectors. Labor's victory provides more certainty around Australia's A$14bn ($9.06bn) green hydrogen subsidy scheme, which will help steel producers transition towards hydrogen-powered steel furnaces. The opposition Coalition during the election pledged to scrap the programme, which will allow producers to claim A$2/t of green hydrogen produced from 2027. Australian steelmaker NeoSmelt and South Korean steelmaker Posco are developing electric iron smelters in Western Australia (WA) that produce hot-briquetted iron, which is used in the green steel process. Both projects will initially rely on natural gas but may transition to hydrogen-based processing as hydrogen production rises. Australia's hydrogen tax credits may prove crucial given ongoing hydrogen production challenges. South Australia's state government closed its Office of Hydrogen Power SA on 2 May, following a funding cut earlier this year. Labor can now also move forward with plans for A$2bn in low-emissions aluminium production credits, beginning in 2028-29. Smelters will be able to claim credits per tonne of low-carbon aluminium produced, based on their Scope 2 emission reductions. The party's proposal does not include any blanket credit for producers. Labor's aluminium production credits are aimed at supporting the Australian government's goal of doubling the country's share of renewable power from about 40pc to 82pc by 2030. Australian producers export about 1.5mn t/yr of aluminium, according to industry body Australian Aluminium Council, from four smelters located around the country. Green iron funding Labor's election win also secures its A$1bn lower-emission iron support pledge , first announced in late February. Half of the fund will go towards restarting and transitioning the 1.2mn t/yr Whyalla steelworks in South Australia into a green steel plant. The other half will support new and existing green iron and steel projects to overcome initial funding barriers. Labor has not allocated any funding through the programme yet. By Avinash Govind Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Generic Hero Banner

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more