Magnesium Scrap Consumption: Bright Future Anticipated

Magnesium Scrap Consumption 

Bright Future Anticipated

This small but important metal market has excellent potential for expansion this decade, say industry officials.

If you judged the magnesium scrap market simply by its size, there might be a tendency to overlook it, particularly if you were making a mental comparison with the aluminum scrap market. Aluminum is magnesium's neighbor and, via the aluminum beverage can, its best customer. But whereas U.S. aluminum scrap consumption last year reached nearly 2.5 million tons, according to the U.S. Bureau of Mines, consumption of magnesium scrap was only 52,668 tons. These mag scrap figures get cut down even further when breaking the number down into 8,000 tons of magnesium-based scrap, and more than 44,000 tons of aluminum-based material. The latter winds up in the production of aluminum beverage cans as a strengthener.

Magnesium's tie to aluminum is strong on the recovery side as well. According to Resource Strategies, Exton, Pennsylvania, more than 19,000 tons of magnesium were recovered from aluminum-based scrap last year. Aluminum used beverage cans, (UBCS) represented much of that material.

The potential for expansion of scrap magnesium use is excellent, according to Joseph S. Viland, president of Wabash Alloys, Wabash, Indiana, who addressed the recent International Magnesium Association (IMA) Conference in Cannes, France. Viland stated that "...the potential for secondary magnesium by 2000 could be 75,000 metric tons." Other industry officials at the conference--both in the magnesium and the aluminum industries--echoed his views in describing the continued use of magnesium scrap by secondary aluminum smelters. Said one company executive, "As the recycling rate for aluminum beverage cans continues to reach higher each year, more magnesium will be needed by the secondary aluminum industry. I anticipate a sharp increase in mag scrap usage in the 1990s." There was also belief that overseas demand would show growth as UBC recycling expands abroad.

Looking Beyond Tonnages

Size alone, of course, does not determine a market. Utilization, need by specific consumers, availability of supplies, and recycling capability all play a large part in the shaping of any metal market, and magnesium scrap is no exception. According to recent reports, magnesium industrial scrap, particularly clean magnesium die-cast scrap for use in the AZ9 ID alloy, has been in active demand. One official noted that much of the good-quality magnesium die-cast scrap is being sold by die casters to magnesium companies for recycling. More of this particular scrap grade is expected to become available as die castings in automobiles and computers are recovered and moved into the market.

Discussing the kind of scrap collected from a casting operation, John S. Waltrip, of Dow Chemical Co., Midland, Michigan, told IMA Conference attendees that magnesium clips, castings, and other large pieces of scrap "consist of a dry mass of medium and large chunks of metallic magnesium that also may have a thin film of oil on its surface." Contamination with combustible material should be of particular concern with such material, he cautioned, "because if ignited, it could ignite thin sections of the solid material." Therefore, he suggested, solid scrap should be stored in noncombustible bins or containers, and oily rags, packaging materials, and other similar combustibles should not be placed in these containers.

More magnesium recycling is needed, industry officials agree. Jay Sirdeshpande, of Alcan Aluminium Ltd., Montreal, points out that despite experimentation with other alloys in the production of aluminum cans, “such alloys as 3004, with its magnesium, will continue for the foreseeable future as the dominant body alloy.” UBC's global growth rate of 4.7 percent per year at a 68-percent recycling rate, he notes, will result in more than a 9-percent increase in consumption of prime magnesium by 1995. However, he says, if the growth rate of UBCs is only 1.7 percent--even if the recycling rate reaches 68 percent--"there could be more than a 5-percent reduction in prime magnesium use."

Magnesium scrap processors and consumers look to the prime magnesium market as an indication of where their market will be five years from today. Will there be a definite growth pattern for magnesium? Will demand be maintained at present or better rates? Will supplies for both p and scrap be available? A recent analysis of world magnesium demand and supply by J.F. Vesseler, of Hydro Magnesium Norway (Norsk Hydro), forecasts an overall growth rate of approximately 3 percent per year between 1990 and 1995, with total shipments in 1995 at 294,000 metric tons.

He also forecasts a decrease in magnesium use for aluminum alloying from the present 53 percent to 49 percent by 1995, and an increase in die casting from 12 percent to 17 percent. Magnesium use in desulfurization, he predicts, will remain at 12 percent.

As far as supplies are concerned, Vesseler believes that "by the end of 1995, the industry expects production capacity to have reached 362,000 metric tons," adding that predicted shipments of approximately 294,000 metric tons show that "expected 1995 demand can be met by capacity expansions that have already been decided.

What's Ahead In Other Areas?

Looking beyond the future of magnesium as related to the expansion of primary magnesium and the growth rate of UBC recycling, industry sources are optimistic about the potential for expansion of magnesium scrap use in the die-casting area, which has a forecast annual growth rate of about 10 percent. Since it is from this area of the industry that larger volumes of scrap are expected to become available in the future, that's good news for those handling mag scrap.

Availability of magnesium scrap declined when Volkswagen converted from air-cooled to water-cooled engines. The earlier Volkswagens employing air-cooled engines had been major users of magnesium. Therefore mag scrap could be retrieved from the older cars that were scrapped and Volkswagen scrap became a byword in the magnesium industry during the early 1980s. Now that's all over.

There' s still some hope, however, industry sources say, that the automotive industry will, in future production of cars, absorb greater quantities of magnesium as well as magnesium scrap.

From a pr ice perspective, industry officials point to the fact that magnesium has remained relatively steady at $1.63 a pound, although there has been some discounting of late. Measure this, they say, against the wide fluctuations in the price of aluminum. However, as one aluminum executive noted, the price of magnesium is still high when compared with aluminum.

Magnesium Scrap Consumption 

Bright Future Anticipated

This small but important metal market has excellent potential for expansion this decade, say industry officials.

If you judged the magnesium scrap market simply by its size, there might be a tendency to overlook it, particularly if you were making a mental comparison with the aluminum scrap market. Aluminum is magnesium's neighbor and, via the aluminum beverage can, its best customer. But whereas U.S. aluminum scrap consumption last year reached nearly 2.5 million tons, according to the U.S. Bureau of Mines, consumption of magnesium scrap was only 52,668 tons. These mag scrap figures get cut down even further when breaking the number down into 8,000 tons of magnesium-based scrap, and more than 44,000 tons of aluminum-based material. The latter winds up in the production of aluminum beverage cans as a strengthener.

Magnesium's tie to aluminum is strong on the recovery side as well. According to Resource Strategies, Exton, Pennsylvania, more than 19,000 tons of magnesium were recovered from aluminum-based scrap last year. Aluminum used beverage cans, (UBCS) represented much of that material.

The potential for expansion of scrap magnesium use is excellent, according to Joseph S. Viland, president of Wabash Alloys, Wabash, Indiana, who addressed the recent International Magnesium Association (IMA) Conference in Cannes, France. Viland stated that "...the potential for secondary magnesium by 2000 could be 75,000 metric tons." Other industry officials at the conference--both in the magnesium and the aluminum industries--echoed his views in describing the continued use of magnesium scrap by secondary aluminum smelters. Said one company executive, "As the recycling rate for aluminum beverage cans continues to reach higher each year, more magnesium will be needed by the secondary aluminum industry. I anticipate a sharp increase in mag scrap usage in the 1990s." There was also belief that overseas demand would show growth as UBC recycling expands abroad.

Looking Beyond Tonnages

Size alone, of course, does not determine a market. Utilization, need by specific consumers, availability of supplies, and recycling capability all play a large part in the shaping of any metal market, and magnesium scrap is no exception. According to recent reports, magnesium industrial scrap, particularly clean magnesium die-cast scrap for use in the AZ9 ID alloy, has been in active demand. One official noted that much of the good-quality magnesium die-cast scrap is being sold by die casters to magnesium companies for recycling. More of this particular scrap grade is expected to become available as die castings in automobiles and computers are recovered and moved into the market.

Discussing the kind of scrap collected from a casting operation, John S. Waltrip, of Dow Chemical Co., Midland, Michigan, told IMA Conference attendees that magnesium clips, castings, and other large pieces of scrap "consist of a dry mass of medium and large chunks of metallic magnesium that also may have a thin film of oil on its surface." Contamination with combustible material should be of particular concern with such material, he cautioned, "because if ignited, it could ignite thin sections of the solid material." Therefore, he suggested, solid scrap should be stored in noncombustible bins or containers, and oily rags, packaging materials, and other similar combustibles should not be placed in these containers.

More magnesium recycling is needed, industry officials agree. Jay Sirdeshpande, of Alcan Aluminium Ltd., Montreal, points out that despite experimentation with other alloys in the production of aluminum cans, “such alloys as 3004, with its magnesium, will continue for the foreseeable future as the dominant body alloy.” UBC's global growth rate of 4.7 percent per year at a 68-percent recycling rate, he notes, will result in more than a 9-percent increase in consumption of prime magnesium by 1995. However, he says, if the growth rate of UBCs is only 1.7 percent--even if the recycling rate reaches 68 percent--"there could be more than a 5-percent reduction in prime magnesium use."

Magnesium scrap processors and consumers look to the prime magnesium market as an indication of where their market will be five years from today. Will there be a definite growth pattern for magnesium? Will demand be maintained at present or better rates? Will supplies for both p and scrap be available? A recent analysis of world magnesium demand and supply by J.F. Vesseler, of Hydro Magnesium Norway (Norsk Hydro), forecasts an overall growth rate of approximately 3 percent per year between 1990 and 1995, with total shipments in 1995 at 294,000 metric tons.

He also forecasts a decrease in magnesium use for aluminum alloying from the present 53 percent to 49 percent by 1995, and an increase in die casting from 12 percent to 17 percent. Magnesium use in desulfurization, he predicts, will remain at 12 percent.

As far as supplies are concerned, Vesseler believes that "by the end of 1995, the industry expects production capacity to have reached 362,000 metric tons," adding that predicted shipments of approximately 294,000 metric tons show that "expected 1995 demand can be met by capacity expansions that have already been decided.

What's Ahead In Other Areas?

Looking beyond the future of magnesium as related to the expansion of primary magnesium and the growth rate of UBC recycling, industry sources are optimistic about the potential for expansion of magnesium scrap use in the die-casting area, which has a forecast annual growth rate of about 10 percent. Since it is from this area of the industry that larger volumes of scrap are expected to become available in the future, that's good news for those handling mag scrap.

Availability of magnesium scrap declined when Volkswagen converted from air-cooled to water-cooled engines. The earlier Volkswagens employing air-cooled engines had been major users of magnesium. Therefore mag scrap could be retrieved from the older cars that were scrapped and Volkswagen scrap became a byword in the magnesium industry during the early 1980s. Now that's all over.

There' s still some hope, however, industry sources say, that the automotive industry will, in future production of cars, absorb greater quantities of magnesium as well as magnesium scrap.

From a pr ice perspective, industry officials point to the fact that magnesium has remained relatively steady at $1.63 a pound, although there has been some discounting of late. Measure this, they say, against the wide fluctuations in the price of aluminum. However, as one aluminum executive noted, the price of magnesium is still high when compared with aluminum.