Magnesium Metal: Global Industry Markets and Outlook
World production of primary magnesium, reflecting that in China, rose by an average of 6%py from 500kt in 2002 to 940kt in 2014; preliminary data indicates that production in 2015 fell by 4% to about 900kt in 2015.
In 2015, just seven countries reported production of primary magnesium metal. China’s output was 702kt and accounted for 78% of the global total; Russia and the USA with production of 69kt and 59kt respectively accounted for a further 14%. Secondary magnesium is an important component in global magnesium supply, with production estimated to be between 200kt and 250ktpy, 125ktpy of which is in the USA.
Global growth in the magnesium market is expected to average 3.4%py reaching almost 1.2Mtpy by 2020. Globally aluminium alloys and die casting are predicted to be the fastest growing markets at about 4%py each. The main factor affecting magnesium demand will probably be its use in automobiles, both because of greater unit consumption and increased vehicle production.
The development of magnesium metal with a dense uniform dispersion of silicon carbide nanoparticles could have a significant long term impact on demand. As could magnesium-ion rechargeable batteries that have twice the capacity and energy density of lithium ion batteries.
In the first quarter of 2016 a six-year decline in magnesium prices appeared to have found a floor at US$2,000/t, underpinned by production costs in China where almost 80% of global magnesium is produced. As prices moved below this level at the end of 2015, resistance from producers coupled with firming coal prices and better than expected performance in the Chinese economy pushed the price of magnesium up by 11% in April 2016.
The fob export price for Chinese magnesium is likely to stay in the US$2,000 to US$2,500/t range for the remainder of 2016. Looking further ahead, magnesium prices will probably remain the US$2,000 to US$3,000/t range, assuming continuation of stable supply from China.
There are four new projects aiming for magnesium production before 2020:
- Qinghai Salt Lake in China, which will probably be confined to its first phase of 100ktpy (due on stream in 2017)
- Alliance Magnesium at Magnola, Canada with 50ktpy planned by 2018
- Latrobe in Australia with 40ktpy by mid-2019 and
- SilMag in Norway with 65ktpy in 2018
Global consumption of magnesium is estimated to have grown at an average annual rate of 1.6% from 2008 to 2015. This was after falling 7% in 2008 and 19% in 2009 and then recovering by 18% and 9% in the following two years. Growth was low in 2012 and 2013 but rose to 8% in 2014 to a peak of almost 1Mt. It then fell by 2% in 2015.
Aluminium alloys containing on average about 0.8% of magnesium are used in a wide range of industries, but packaging, transport and construction are the three most important.
Magnesium castings are used chiefly by the automobile industry, but also in aerospace components, defence applications and consumer goods (laptop, tablet and mobile phone cases in particular). The most widely used magnesium castings contain more than 90%Mg alloyed commonly with aluminium. Some castings are alloyed with rare earth elements to give creep and corrosion resistance.