What most investors don't realise is that there is no alternative, magnesium is made from ferrosilicon. Magnesium is used in producing aluminium for the auto industry.
Without it the auto industry will close down.
“There are no alternatives to aluminum production,” said Barclays analyst Amos Fletcher. “If the supply of magnesium stops, the entire auto industry may be forced to shut down.”
No alternatives
Magnesium is essential for aluminum production. That material is needed on a large scale for building cars. It is used in gearboxes, steering columns and brakes, seat frames, at fuel tanks, in the bodywork and for many other parts.
About 85 percent of global magnesium production comes from China and much of that comes from Yulin City in Shaanxi Province. But due to an energy crisis, production restrictions have been imposed on many factories there. Of the fifty magnesium factories, only fifteen are still active. They also run at half power to meet the energy requirements. It will remain that way at least until the end of the year.
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