Demand for magnesium from automobile industry to keep growing-Interview with Gang Zhao-General Manager-Shenmu Dongfeng Magnesium Co., Ltd.

Shenmu Dongfeng Magnesium Co., Ltd. was established in June 2004 and is located in the Jingjie Industrial Park within China’s National Energy and Chemical Industry Base. The company has a fixed asset investment of RMB980 million and is equipped with advanced production facilities. It has built production lines with an annual production capacity of 20,000 tons of magnesium ingot, 1.6 million tons of semi-coke, and 160,000 tons of coal tar, as well as projects including 2,000 tons of magnesium alloy die-casting parts and a 1×30MW energy recovery power generation project. Its product portfolio covers semi-coke, coal tar, magnesium metal, magnesium alloys (ingots and rods), radiators, single-wheel hubs, electric vehicle wheel hubs, household appliance parts, and auto parts, all certified under the IATF16949:2016 Quality Management System.
Asian Metal: Hello, Mr. Zhao. Welcome to Asian Metal’s exclusive interview column. To begin, could you please introduce your company’s main structure and core business?
Mr. Zhao: Thank you to Asian Metal for the interview. Dongfeng Magnesium is a comprehensive enterprise integrating magnesium ore development, magnesium smelting, deep processing of magnesium alloys, and a circular economy industrial chain. Our main business covers primary magnesium production, magnesium alloy die-casting, profile processing, and recycled magnesium utilization. We serve key industries such as automotive, aerospace, and 3C electronics. Guided by the principle of “green manufacturing,” the company has developed a low-cost and low-carbon industrial model through self-supplied power generation and resource recycling. Our product range includes semi-coke, coal tar, magnesium metal, magnesium alloys (ingots and rods), radiators, single-wheel hubs, e-bike wheel hubs, household appliance parts, and auto components—all certified by the IATF16949:2016 system. At present, Dongfeng Magnesium is actively promoting the construction of its Phase II 1×30MW residual energy power generation project, along with a 50,000tpy high-end magnesium alloy profile extrusion, forging, and lightweight transportation equipment project. Ultimately, the company aims to form a circular economic model: using coke oven gas to produce magnesium metal; utilizing surplus gas and waste heat for power generation; applying generated electricity and semi-coke for ferrosilicon smelting; using ferrosilicon as a reducing agent; employing self-generated electricity and gas to produce magnesium; producing non-fired bricks and cement from magnesium slag; and manufacturing magnesium alloys, die-casting parts, and profiles with self-produced magnesium and electricity—achieving both economic and environmental benefits.

Asian Metal: As we enter the fourth quarter of 2025, how do you view the magnesium price trend and the current market supply-demand situation?
Mr. Zhao: In the fourth quarter, as more plants resume operations and industry operating rates rise, supply is expected to increase by around 7%, making the overall market relatively well-supplied. On the demand side, the domestic market continues to show structural highlights, supported by the growth of new energy vehicles and two-wheel electric vehicles. However, overseas demand remains sluggish due to a weak global economy and high inventory levels. In addition, the implementation of the EU Carbon Border Adjustment Mechanism (CBAM) poses new challenges for magnesium exports and applications. Overall, the market is likely to show a pattern of “strong domestic demand but weak exports.” It is also worth noting that coal prices typically rise in the fourth quarter, while semi-coke faces weak sales and a widening price inversion. Taking all these factors into account, mainstream magnesium ingot prices are expected to fluctuate between RMB16,000-17,000/t EXW D/P.
Asian Metal: Since early 2025, the price gap between magnesium and aluminum has widened considerably. How has this affected downstream applications of magnesium products?
Mr. Zhao: Since the beginning of 2025, the magnesium-aluminum price gap has remained around RMB2,000/t. With its price advantage and lightweight properties, magnesium alloy is gradually transforming from a “potential material” into a practical choice across industries—particularly in new energy vehicles and electric bicycles. This shift has significantly boosted market confidence and demand. The continuous increase in processing fees and the tightening supply of magnesium alloy in the spot market clearly reflect this trend.

Asian Metal: In promoting deep-processed magnesium products and magnesium-for-aluminum substitution, what difficulties and challenges has your company encountered?
Mr. Zhao: While we are working to seize the market opportunity brought by the widening magnesium-aluminum price gap, we also face several challenges. First, on the technical side, we must continue developing high-strength and high-toughness magnesium alloys to address corrosion resistance issues and achieve effective substitution for aluminum in components such as battery trays and electronic housings. Second, on the industrial collaboration front, we are partnering with leading new energy vehicle manufacturers to develop lightweight magnesium alloy components. In 2025, magnesium alloy automotive parts will remain a key focus for us. However, given the current sluggish economy and weaker-than-expected auto sales, the increase in magnesium alloy usage per vehicle has not yet translated into a significant rise in total consumption.
Asian Metal: Could you please share the current progress and economic performance of Dongfeng Magnesium’s circular economy model based on magnesium production and self-generated power?
Mr. Zhao: Our circular economy system has begun to show tangible results. On the aspect of energy efficiency, the self-owned power plant has reduced electricity costs by about 20%. Combined with recycled magnesium utilization, the overall production cost is 15%–20% lower than the industry average. When it comes to the economic performance, in 2024, the gross profit margin of our magnesium alloy deep-processing segment increased by about 5% year-on-year, and die-casting orders rose by 30%. Going forward, we plan to further expand recycled magnesium capacity to reinforce our cost and competitive advantages.

Asian Metal: The new energy vehicle sector is a major growth area for magnesium applications. What is your outlook on magnesium usage in automotive components?
Mr. Zhao: Magnesium applications in automobiles mainly fall into three categories. The first one is structural parts, such as door frames and seat brackets, achieving 30%–40% weight reduction; The second one is powertrain and electrical systems, including battery housings and motor casings, which have passed validation tests by multiple OEMs; The third one is chassis parts: such as steering knuckles and wheel hubs, where pilot products have met performance standards and are expected to enter mass production by 2026. With the accelerating demand for vehicle lightweighting, we expect the compound annual growth rate (CAGR) of automotive magnesium usage to exceed 25% over the next five years.
Asian Metal: How is Dongfeng Magnesium positioning its products in domestic and overseas markets, and what will be your future focus?
Mr. Zhao: At present, Dongfeng Magnesium mainly focuses on the domestic market. Looking ahead, we plan to expand into overseas markets, implementing a dual-market strategy to strengthen competitiveness under the current global landscape. High-end magnesium alloy extrusion, forging, and lightweight transportation equipment projects will remain our key development priorities in the next phase.

Asian Metal: Thank you, Mr. Zhao, for sharing your insights with Asian Metal. We wish Dongfeng Magnesium continued success in the future!
Mr. Zhao: Thank you, Asian Metal. It’s an honor to be interviewed by your team. We also wish Asian Metal greater achievements ahead!