China's magnesium producer Jincheng Linchun is on track to launch a metal and alloy production plant to meet rising demand for energy-saving and weight-reducing materials from the automotive industry.
The firm has invested 180mn yuan ($26mn) to build a plant with a combined capacity of 10,000 t/yr for metal and alloy in Lingchuan county, north China's Shanxi province. It has completed site construction and is expected to commission the plant at the end of October.
Linchun has mining rights for key feedstock dolomite
The company will have a full industry chain from dolomite to magnesium metal and alloy following the launch of the plant, which will help it reduce production costs and avoid losses when prices for dolomite and magnesium metal rise.
Magnesium alloy, a key lightweight material, is used to produce die-casting automotive parts, including accelerator brake brackets, instrument panel brackets and clutch housing. It is 30-45pc lighter than steel products.
China's automotive output fell by 13.5pc from a year earlier to 13.93mn units during January-July, with sales down by 11.4pc to 14.13mn units. Domestic new energy vehicle output rose by 39.1pc to 701,000 units, with sales increasing by 40.9pc to 699,000 units during the same period, data from the China association of automobile manufacturers show.
Tighter fuel standards were implemented in China in July, which is expected to boost long-term demand for lighter automotive parts and their metal feedstock, including aluminium, magnesium and silicon.