magnesium

China's magnesium market remains "in chaos," although the country holds some of the world's largest reserves of the metal. Most plants cannot guarantee the quality of their product and, as a result, 80 percent of Chinese metal is exported instead of being consumed domestically. Energy shortages, environmentally damaging discharges and comparatively backward technology add to the problems in the Chinese magnesium market. China, which produced 450,000 tonnes last year compared with 5,300 tonnes in 1990, has 22.5 percent of global magnesium resources. Its reserves are largely in the Henan, Ningxia, Qinghai and Shanxi provinces. China could be planning to introduce a 10-percent tax on all magnesium exports early next year in line with similar moves this year designed to reduce China's exports of raw materials and ease its massive trade surplus with Western nations. An export tax could reduce the amount of magnesium coming out of China, exacerbating already tight market conditions fueled by Norsk Hydro ASA's impending departure from the magnesium business.