Volkswagen's head of sourcing said it was too early to say if the magnesium shortage would eclipse the chip crisis © JENS SCHLUETER/AFP via Getty Images
Volkswagen's head of sourcing said it was too early to say if the magnesium shortage would eclipse the chip crisis © JENS SCHLUETER/AFP via Getty Images

Fears for aluminium supply as magnesium shortage bites

9 November 2021

The automotive sector is bracing for shortages of aluminium when magnesium stocks reach “critical levels” at the end of November.

The European Association of Automotive Suppliers (CLEPA) told Supply Management aluminium stocks were already low and threatening car production, particularly electric vehicles (EVs) that depend on it to cut weight.

A CLEPA spokesperson said: “Magnesium stocks are likely to reach critical levels towards the end of November and could then start to disrupt aluminium production. This will hit at a moment when [aluminium] inventories are low. An increasing number of suppliers of parts and intermediate goods are reporting quickly falling inventories. 

“As a core component, aluminium could further disrupt the production of vehicles and then impact all automotive suppliers as orders from vehicle manufacturers may then be cancelled.”

CLEPA said growing demand for EVs was “reinforcing the sector’s dependence on aluminium,” as EVs contain up to 600kg of aluminium, compared to around 150kg in an internal combustion engine vehicle.

In a survey CLEPA found 79% of automotive suppliers considered global supply chain disruptions a “very high risk” to their operations, and 15% considered them “high risk”. 

A third (32%) were mostly concerned about raw materials including magnesium, used to make aluminium and steel, and 60% were concerned about semiconductors.  

Sigrid de Vries, CLEPA secretary general, said: “Supply shortages of critical minerals and semiconductor chips are causing a compounded risk for our industry during a crucial time of green and digital transformation. 

“Shortages threaten thousands of supply chains and the millions of jobs that rely on them. Transparency, collaboration and flexibility are needed to mitigate and prevent future supply chain disruptions.”

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said the severity of the semiconductor shortage had “masked” other materials shortages, including magnesium.

He told SM: “The global shortage of semiconductors continues to create an unpredictable and disruptive environment for the automotive sector with vehicle production and supply chains negatively impacted. 

“The severity of the chip shortage is, however, masking other component shortages and there is global concern about the availability of magnesium, a key material in the production of metals for the automotive industry and other manufacturing sectors.”

He warned there are no “quick fixes”. “All manufacturers are working hard to mitigate the effects and fulfil orders but a concerted international effort is needed to avoid further supply issues which would damage the global industry and economies,” he said.

Volkswagen's head of purchasing Murat Aksel has said magnesium shortages will “definitely” take place. 

“We cannot forecast right now if the shortage on magnesium will be bigger than the semiconductor shortage,” he said in an earnings call.

Magnesium shortages were triggered after China, the world’s biggest producer, closed 35 of its 50 magnesium smelters to save energy. The country produces 87% of the world's supplies. 

The automotive industry has already been rocked by shortages of semiconductors, which has led to companies halting production. 

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