A short while ago, we presented a news story detailing how the Chinese magnesium industry was edging closer and closer to a full-on shut down due to a spike in demand it couldn’t compensate for. Well, that predicted shortage has now arrived, and it has implications for the entire auto industry at large.
With such a massive percentage of the world’s magnesium production delegated to one global superpower, other supplying nations like Russia, Israel, and the US are struggling mightily to compensate for the significant adverse change in global supply.
Magnesium is a metallic element that requires a large degree of difficulty in its mining, cultivation, refining, and manufacturing processes. Such a labor-intensive process can only be supported with strong centralized manufacturing sectors.
Much like the ones China was able to take advantage of before the current global health crisis more or less put international manufacturers on an even playing field once more. In a complex, global economy, the complete collapse of one nation’s manufacturing sector has the potential to create a domino effect that touches every other industry on earth.
It’s a phenomenon that inevitably falls upon the average consumer to compensate for higher ownership costs and longer waiting times to purchase the vehicles they’d like to buy. Like the Indian Tata-operated Jaguar-Landrover alliance, some manufacturers have already predicted when they believe the global chip shortage will finally subside sometime in the second half of 2022.
With another global resource shortage seemingly poised to rock the industry once again, they’d best get started on calculating the magnesium shortage as well if they want to maintain that 2022 resurgence.