Magnesium Market Size, Share & COVID-19 Impact Analysis, By Application (Aluminum Alloying, Die Casting, Desulfurization, Metal Reduction, and Others) and Regional Forecast, 2020-2027

The global magnesium market size was USD 4,115.0 million in 2019 and is projected to reach USD 5,928.1 million by 2027, exhibiting a CAGR of 5.4% during the forecast period. Asia Pacific dominated the magnesium market with a market share of 33.88% in 2019.

Magnesium is a chemical element that forms an integral part of applications ranging from aircraft & missile components to laptops and television. It is observing surging demand from the automotive industry, owing to the increasing substitution of aluminum and steel to minimize the weight of vehicles to comply with the changing emission regulations. The consumption of Mg is rising owing to the increasing demand for aluminum alloy from the beverage can manufacturers. The development of magnesium-based batteries is expected to grow and to provide growth opportunities for the market.

The shutdown of Manufacturing Facilities during the COVID-19 Pandemic Reduced the Demand for Mg

The effect of the COVID-19 pandemic on the market is assessed to be substantial on the automotive, building & construction, aerospace, and energy industries. The pandemic imposed an abrupt stoppage to the raw material mining, production facilities, and supply chains. As a result, several industries such as automotive, building, energy, and metal processing are struggling to generate enough revenue to sustain their operations. The sudden closure of production units reduced the output of the manufacturing sector and also affected the GDP. Automotive manufacturers reduced their production rates due to the fall in demand and the global lockdown. The decreasing production has also affected material suppliers and OEMs. However, the growing demand of magnesium for use in alloyed aluminum from the beverage can manufacturers due to the surging consumption of packaged beverages decelerated the impact of COVID-19 on the market.

LATEST TRENDS

Development of Magnesium-based Batteries is a Prominent Trend

Mg metal was speculated to be more energy-dense and a safer alternative to lithium-ion batteries. Lithium metal is unstable and can catch fire when exposed to air in its natural state. Batteries based on lithium are made safe for use by embedding the ions obtained from the lithium metal into graphite rods, which are then used in batteries. Due to the absence of the metal, the power storage capacity of the battery is reduced. The metal is highly stable and has more potential for energy storage compared to lithium. Toyota Research Institute of North America (TRINA) has been developing Mg-based batteries for the consumer market.

DRIVING FACTORS

Increasing Incorporation of Mg in Automobiles to Drive Growth

It is one of the lightest metals with an excellent strength to weight ratio and the ability to withstand high temperatures. When alloyed with aluminum, it is used for the manufacturing of automotive components. According to the U.S. Automotive Material Partnership, 250 lbs of Mg can replace 500 lbs of steel, and 90 lbs of Mg can replace 150 lbs of aluminum, resulting in a 15% weight reduction of vehicles. The increasing initiatives by automotive manufacturers to reduce weight and improve the fuel efficiency of vehicles to minimize emissions will boost the product demand. Additionally, according to the statements in the Latrobe Magnesium’s presentation, automotive manufacturers in China have planned to increase Mg in cars from 8.6 kg in 2017 to 45 kg in 2030 in order to meet the emissions standards. This is expected to drive the market growth.

RESTRAINING FACTORS

Corrosion Resistance and Welding Issues with Mg to Obstruct Growth

Mg is a highly active metal that can easily react with oxygen, which can be damaging during the welding process. The high affinity of Mg alloys towards oxygen makes the construction of complex structures in the automotive and aerospace industries a tedious task. Some of the processing defects which can be found during the laser welding of alloys include substantial spatter, unstable weld pool, undercut, and a strong tendency to drop through weld pools. Furthermore, alloys have low resistance towards corrosion, especially when they contain impurities such as nickel and iron. The low corrosion resistance is one of the major factors hindering the working of cooling systems of an engine. All the factors mentioned above are expected to hamper the growth of the Mg market.

SEGMENTATION

By Application Analysis

Aluminum Alloying Segment Held a Major Share of the Market in 2019

Based on the type, the market is segmented into aluminum alloying, die casting, desulfurization, metal reduction, and others. The aluminum alloying segment held the dominant share in the Mg market in 2019. The dominance of the segment is attributed to the ability of Mg to increase the strength of the alloy when added to it and hardening it. These alloys are majorly used in the manufacturing of beverage cans. Other uses include pressure vessels, buildings, and chemical tankers. Increasing investments in the beverage industry is another factor supporting the growth of the segment.

The die casting segment is estimated to observe a significant growth rate during the forecast period owing to the high demand from the automotive and aerospace industries. Rising investments in the automotive industries are set to offer rapid growth opportunities for the Mg market. The metal is used for the removal of sulfur content from iron and steel. Massive investments by governments of emerging economies to improve the infrastructure will drive the growth of the desulfurization segment.

REGIONAL INSIGHTS

The market size in Asia Pacific stood at USD 1,394.3 million in 2019. It occupies the largest share of the market owing to the presence of major producing and consuming countries in the region. Increasing automotive production in India and China is projected to surge the regional market. Additionally, plans by automotive manufacturers in China to increase the amount of Mg in vehicles are expected to drive the market. The U.S. is the major contributor to the growth in North America. It is characterized by the increasing substitution of steel and aluminum by Mg in automobile bodies. The substitution is estimated to propel the product consumption in aluminum alloying.

Countries such as Germany, France, and the U.K. were the major contributors to the growing demand for magnesium in Europe. The increasing integration of Mg in automotive to minimize its weight and reduce carbon emissions will drive the Mg market in Europe. Additionally, initiatives by the European Union to achieve a circular economy are expected to increase the demand.

Latin America contributed substantially to the metal magnesium market growth owing to the increasing infrastructure development and urbanization activities in emerging countries. Rising investments in the manufacturing sector in the Middle East & Africa will drive the market in the region.

KEY INDUSTRY PLAYERS

Serving Various Industries to Strengthen the Presence of Key Players in the Market

The competitive landscape of the Mg market is fragmented. Key market players are investing in research activities for new product development. Companies in the market are expected to focus on new alloys that can replace steel and aluminum. They are implementing acquisition and expansion strategies to surge their overall presence in the market. Many manufacturers are establishing new plants in developing countries to serve growing markets and upcoming opportunities.

LIST OF KEY COMPANIES PROFILED:

• NIPPON KINZOKU CO., LTD. (Japan)


• Latrobe Magnesium (Australia)


• Alliance Magnesium Inc. (Canada)


• US Magnesium LLC (U.S.)


• Regal Magnesium Co. Ltd. (China)


• Dead Sea Magnesium Ltd. (UK)


• RIMA Group (Italy)


• Wenxi YinGuang Magnesium Industry (Group) Co., Ltd. (China)


• Magontec Ltd (Australia)


• MagOne Products (Canada)


• WHY Resources (Canada)


• Other Players

KEY INDUSTRY DEVELOPMENTS:

• In September 2020 – Alliance Magnesium signed an agreement with the Carrefour de l'Innovation on materials of the MRC des Sources. The agreement, for a minimum period of two years, will allow AMI to benefit from 50% of CIMMS facilities, equipment, and technical staff, in addition to having unlimited access to the laboratory. The collaboration began on August 1, 2020 and the research and development work has already started.


• In August 2020 – Latrobe Magnesium Limited (LMG) is set to build a Mg plant in Victoria’s Latrobe Valley. LMG is investigating using a hydromet process combined with the thermal reduction process. The plant will use the world’s first patented extraction process of combined hydromet/thermal reduction to extract the metal.  Construction of the plant is expected to begin in March 2021, with the initial production due 18 months later.


• In January 2019 – MagOne Products announced an agreement with Tech Magnesium for the acquisition of silicothermic and aluminothermic reduction processes for low cost, environmentally-friendly production of primary metal (Tech Mag Technology). During the term of the agreement, MagOne has an exclusive, worldwide license to the Tech Mag Technology, as well as the exclusive right to acquire the full ownership of the technology and all associated intellectual properties.

REPORT COVERAGE

The market report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading applications of the product. Besides this, it offers insights into the magnesium market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the developed market over recent years.

Report Scope & Segmentation