Magnesium: Cycles

How China's 2021 power cuts doubled the price

Magnesium prices swing with Chinese energy policy because the Pidgeon process burns a lot of coal. When Chinese provinces rationed power in late 2021, supply tightened sharply. The US spot Western price averaged $7.59/lb in 2022, more than double 2021's $3.53. It slid to $3.20/lb in 2025 as inventory was ample and secondary metal displaced primary. The European free-market price fell from $5,206/t in 2022 to about $2,500/t in 2025. Producers ran a world magnesium cartel in 1934–36, an early attempt to tame this market (Tilton & Guzmán, pdf p. 193).

US price, US spot Western magnesium metal (S&P Global Platts)

Super-cycles in magnesium

Magnesium has no long public price series in the sources used, and its price is set mainly by Chinese supply. China's low-capital Pidgeon smelters drove Western electrolytic plants out of business from the 1990s, and since then prices have spiked whenever Chinese output was cut. The 2021 energy-control spike took Chinese prices to a record of about 70,000 yuan/t, five times the year's low. Prices have since slid back as capacity (1.8 Mt) far exceeds output (1.1 Mt). These are policy-driven spikes rather than demand super-cycles.

1. 1990s-2001

   Chinese Pidgeon producers entered world markets and undercut electrolytic plants. France's only magnesium plant at Marignac closed in 2001; once China dominated, it raised prices to levels that would have kept the French plant profitable (Pitron 2020, quoting Arnaud Montebourg).

   No price figures in the sources used; China supplied 91% of world primary magnesium by the 2023 EU assessment.

2. 2021

   China's NDRC ordered Yulin to cap output under energy and emissions controls, and Fugu county suspended all 35 producers in September. China's exports still hit a record 477,200 t for the year.

   Chinese 99.9% ingot rose from a 2021 low of 13,950 yuan/t to a record 70,000 yuan/t in September (S&P Global); Argus assessed 60,000-61,000 yuan/t ex-works and $9,700-9,800/t FOB China, highs since its assessments began; the 2021 average was 25,244 yuan/t, up 86%.

3. 2022

   Western buyers, short of non-Chinese supply after the Utah smelter failed, kept paying high prices after Chinese prices eased.

   US spot Western price averaged $7.59/lb in 2022 against $3.53/lb in 2021; European free market averaged $5,206/t (USGS).

4. 2023-2025

   Chinese output recovered, demand was weak and secondary metal replaced some primary use. The last US primary producer filed for bankruptcy in September 2025.

   European free market fell from $3,240/t (2023) to $2,850/t (2024) and about $2,500/t (2025); US spot Western averaged $3.20/lb in 2025 (USGS).

What drives the cycle

• Chinese energy and emissions policy. With 86% of output in coal-based Pidgeon plants, production caps in Shaanxi can move world prices within weeks, as in September 2021.
• Ferrosilicon and coal costs. The reductant and fuel dominate Pidgeon costs, so their prices set China's cost floor.
• Car lightweighting. Die castings are the largest use, but magnesium is still only about 1% of vehicle mass, so adoption trends matter for long-run demand (Smil 2016).
• Aluminium can and sheet output. Can sheet alloys need magnesium with no easy substitute, tying demand to beverage packaging.
• Titanium sponge demand. Kroll plants consume magnesium; aerospace growth pulls on supply in China, Japan, Russia and Kazakhstan.
• Trade defence and stockpiling. US tariffs (8% on unwrought metal) and stockpile acquisitions (3.5 kt planned for FY2025) shape Western premiums over Chinese prices (USGS).

Metrics to track