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Economic Issues & Market Analysis Brief: Metal Casting - Magnesium

The rise of new global players (Australia, China, Israel, Russia) and increasing auto demand that further spurs investment in new plants will be the driving market influence behind magnesium production and use over the foreseeable future.

Magnesium demand worldwide (around 450,000 tons currently) is anticipated to increase significantly over the coming years, particularly in the die casting industry. The push for lighter automobiles is the primary driver. Magnesium can make 1.55 times as many parts as the same weight of aluminum. For this reason, the use of magnesium in die casting is growing between 10 and 15% annually.

Growth estimates vary as to actual future demand for magnesium. Conservative estimates target demand in 2009 at just over 700,000 tons. More optimistic forecasts suggest demand could exceed 1 million tons by 2010. The higher estimates include projected growth in the automotive (and other transportation) vehicle markets. In order to meet the anticipated demand, it's projected that one new plant per year will need to be built through 2013.

The concern is that as more parts (mainly automotive) are specified for magnesium, the demand could outstrip supply and force prices too high. This could have a negative impact on demand and delay the projected increase in demand. What's interesting is that market information sources all currently project that no new primary magnesium facilities will be sited in North America. Several in Australia, Africa, Canada and China were projected.

In November of 2001, the U.S. International Trade Commission (ITC) established duties on imports of magnesium (both compounds and metal) from China, Israel, and Russia.