China contributes 80% of magnesium supply
World demand for magnesium is around 1 million metric tons per year, according to Luxfer Holdings PLC.
China provides about 80% of the world’s supply of this mineral.
However, Western production is significant, from North American suppliers such as Dead Sea Magnesium in Israel, RIMA Industrial in Brazil, and two smelters in Russia.
Luxfer is a global industrial company innovating niche applications in materials engineering.
It focuses on creating value through the use of its wide range of technical knowledge and proprietary technologies. Luxfer’s high performance materials, components and high pressure gas containment devices are used in defense, first aid and healthcare, transportation and general industrial applications.
In particular, Luxfer purchases approximately 40% of its magnesium needs from China.
It uses only US-sourced materials for its products sold to the US military, for which sourcing from the US is mandatory.
Magnesium
The company primarily focuses on product lines related to magnesium alloys, zirconium chemicals, and carbon compounds.
Luxfer has leadership positions in key product areas, including aerospace magnesium alloys, photo-etched plates, zirconium chemicals for automotive catalytic converters, and high-pressure composite cylinders for breathing applications and a wide variety of other uses.
Globally, the company operates 13 manufacturing plants in the United States, United Kingdom, Canada and China, one of which relates to discontinued operations, and also has a joint venture in Japan.
It employs approximately 1,400 people, including temporary staff, of which fewer than 100 are related to discontinued operations.
In 2021, its net sales from continuing operations were $374.1 million (2020: $324.8 million, 2019: $373.4 million), and its net income from continuing operations was $30.0 million (2020: $20.8 million, 2019: 8.7 million).
The key raw materials used by its Elektron segment are magnesium, zircon sand and rare earths.
You generally purchase raw materials from spot vendors under standard terms and conditions. It has long-term supply contracts with the U.S. Magnesium for the purchase of magnesium ingot raw material for military and commercial applications.
The military contract covers magnesium purchases through December 31, 2023, while the commercial contract covers purchases through December 31, 2022.
