The reason why I mentioned magnesium is that its a power intensive commodity to produce.
Europe was once a producer but the high cost of power has driven the production to Asia (China mainly). Magnesium is produced using ferrosilicon as a reducing agent, ferrosilicon alone uses 8,500kWh to produce one tonne. The ferrosilicon smelters in Europe have already gone bust due to expensive power, OZL in Slovakia only has one FeSi furnace operating most others are closed due to high power costs. Even though the FeSi is at record prices they still cannot make money the Chinese, Malaysia and India undercut prices.
The cost of power has been increasing in the EU for years, it isn't just a new problem.
The huge surge in power costs lately has actually shut more than 1/2 of European smelters, from Spain, France, Belgium, Slovakia, Poland, Ukraine. Ukraine can only afford to operate furnaces at night when power is slightly cheaper.
Ferroglobe the largest alloy producer has not only closed a smelter complex in France but they're stripping it entirely, they know there is no future left in Europe to produce high energy commodities. The shift is not rapid but its happening everyday and the end result will be that all high energy requirement commodities will move to Asia.
The more that shuts down in Europe the more new start ups in China. This is a typical example, FeCr is produced in Finland,Turkey ,Russia and Kazakhstan. The Yilmaden smelter in Turkey opens and closes due to high power costs as well as depressed prices.
The Outokumpu FeCr smelter in Finland operates on hydro power. Hydro power is the only way to operate a viable smelter in Europe. All other FeCr smelters in the EU are already closed.
Two HC FeCr plants with combined capacity of over 2 million t to be built in GuizhouGuizhou Dushan Jusheng Smelting and Xiangyu will build two separate HC FeCr plants.
