Magnesium: great future potential

Roskill has released its new magnesium metals market report with forecasts out to 2020. It is an excellent read for anyone needing a comprehensive overview of this rapidly evolving industry. Magnesium Metal: Global Industry, Markets & Outlook, 12th Edition, 2016 is now available from Roskill Information Services.

Global growth in the magnesium market is expected to average 3.4%/y reaching almost 1.2 Mt/y by 2020. Globally aluminium alloys and die casting are predicted to be the fastest growing markets at about 4%/y 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 dense uniform dispersion of silicon carbide nanoparticles (14% by volume) in magnesium through nanoparticle self-stabilization in molten metal could have a significant long term impact on the demand for magnesium alloys. The material is said to provide an enhancement of strength, stiffness, plasticity and high-temperature stability, which delivers a higher specific yield strength and specific modulus than nearly all structural metals.

Another potentially significant new use in the long term is in magnesium-ion rechargeable batteries that have twice the capacity and energy density of lithium ion batteries. The identification by Toyota of a compatible electrolyte was being hailed as a major breakthrough in mid-2016.

In the first quarter of 2016 a six-year decline in magnesium prices appeared to have found a floor at $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 $2,000 to $2,500/t range for the remainder of 2016. Looking further ahead, magnesium prices will probably remain in the $2,000 to $3,000/t range, assuming continuation of stable supply from China. Magnesium supply and the inputs required for its production are overwhelmingly under Chinese control. Demand from Chinese consumers is therefore unlikely to outstrip supply.

The exceptions to Chinese control are the USA, where the market is protected by punitive anti-dumping duties and is supplied by domestic primary and secondary production and some small imports mainly from Israel; and the FSU where there is domestic output primarily for the in-house production of titanium sponge.

World production of primary magnesium, reflecting that in China, rose by an average of 6%/y from 500,000 t in 2002 to 940,000 t in 2014; preliminary data indicates that production in 2015 fell by 4% to about 900,000 t in 2015.

In 2015, just seven countries reported production of primary magnesium metal. China’s output was 702,000 t and accounted for 78% of the global total; Russia and the USA with production of 69,000 t and 59,000 t respectively accounted for a further 14%. Secondary magnesium is an important component in global magnesium supply, with production estimated to be between 200,000 t and 250,000 t/y, 125,000 t/y of which is in the USA.

There are more than 50 magnesium smelting operations in China, most of them in the provinces of Shaanxi and Shanxi, which accounted for 61% and 28% of production respectively in 2015.  On a company basis, the largest productive capacity is held by Shanxi Yinguang Huasheng with 80,000 t/y.  This is followed by Ningxia Hui-Ye Magnesium with 60,000 t/y.

US Magnesium in Rowley, Utah, USA, with capacity for 76,500 t/y and plans to increase to 90,000 t/y, is probably the largest magnesium producer in the world. VSMPO-Avisma in Russia with capacity for 60,000 t/y ranks third or fourth. Dead Sea Magnesium in Israel is a high cost producer with capacity for 35,000 t/y; it has announced plans to terminate operations in 2017.

There are four new projects aiming for production before 2020:

  • Qinghai Salt Lake in China, which will probably be confined to its first phase of 100,000 t/y (due on stream in 2017)
  • Alliance Magnesium at Magnola, Canada with 50,000 t/y planned by 2018
  • Latrobe in Australia with 40,000 t/y by mid-2019
  • SilMag in Norway with 65,000 t/y in 2018

In addition Century Sunshine announced plans to expand its Baishan plant by 50,000 t/y by the end of 2016; Posco in South Korea plans to expand its Gangneung plant to 20,000 t/y (from 10,000 t/y) in 2016 and to 100,000 t/y in 2018; and Esan Eczacibasi’s plant at Ekisehir in Turkey was being ramped up to 15,000 t/y in 2016, with plans to double capacity by 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 (35% of magnesium use in aluminium alloys), transport (25%) and construction (21%) are the three most important.  About 350,000 t of magnesium were used in 2015.

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 most commonly with aluminium.  Some castings are alloyed with rare earth elements to give creep and corrosion resistance.  Globally about 315,000 t of magnesium were used in 2015.

Magnesium is a reductant used in the production of titanium sponge, using about 130,000 t in 2015 or 14% of total demand. Much of the magnesium used, however, is produced in-house in Russia, Ukraine and Kazakhstan from the recycling of magnesium dichloride generated in the production of titanium.  Actual new magnesium used is probably closer to 80,000 t/y.

The fourth major use of magnesium is in desulphurisation of steel; about 95,000 t were used in 2015. Sulphur causes brittleness in steel and low sulphur facilitates modern production processes.  Other significant uses of magnesium are as a nodulariser in cast iron and in cathodic protection of metal structures.