Interestingly, the company hasn't released any price-sensitive news to the ASX since late August. Still, the market seems to be enthused by the producer of magnesium alloy ingots and magnesium and titanium anodes.

At the time of writing, the Magontec share price is 54 cents, 12.5% higher than its previous close.

Though, that's lower than it was earlier today. The Magontec share price reached 65 cents in intraday trade today, representing a 35% single-day gain.

And it's not alone. Many ASX magnesium-focused stocks have seen their value surge over the last few days.

Let's look at what might be driving the company's stock higher.

Magontec share price surges higher

The Magontec share price is taking off this week amid a potential global shortage of magnesium.

According to a group of European industry associates, the continent expects to run out of magnesium next month.

In a joint statement, 11 European entities noted the impact of China's ongoing energy crunch will extend to Europe, which relies on the Asian nation to produce 95% of its magnesium.

According to reporting by ABC News, an electricity shortage in China has seen the country's magnesium production slow. China's exports of the material could potentially be cut by 10% this year as a result.

While the demand has seen magnesium producers' stock take off this week, Magontec differs from other ASX magnesium companies.

Magontec doesn't produce magnesium. However, it does recycle it. The company has recycling facilities in Germany and Romania and uses recycled magnesium to produce alloy ingots.

Therefore, market watchers might assume the company could continue producing alloy ingots despite a shortage of new magnesium.

Additionally, the company supplies the automotive industry, which is expected to be hit hard by the shortage.

Finally, Magontec's Chinese Qinghai facility receives 75% of its energy needs from hydroelectricity and nearly 10% from solar power. The facility produces magnesium alloy product and, when it can be supplied with magnesium, it might have a greater chance than other producers to run during a power shortage.

However, as the company noted in its annual report, the facility operated at low volumes through financial year 2021.

The post Magontec (ASX:MGL) share price leaps another 13%, up 68% in 2 days appeared first on The Motley Fool Australia.

Following on from a strong showing yesterday, these companies are rocketing again in early trade. This follows a joint call from multiple industries across Europe to address what could become a 'catastrophic' shortage of magnesium.

Let's take a look at the latest development.

No plans for China to ramp up production

As we previously covered, the sudden boom in interest for magnesium miners follows the fall in output of the alloy element from China. Unfortunately, the world has a substantial reliance on China's production of magnesium which accounts for 87% of the world's annual magnesium production.

With China's efforts to curb domestic power consumption, magnesium supply has dwindled. The side-effect is that Europe is believed to only have enough supply to last a few weeks.

The resulting ramifications could be extensive given that magnesium is a commonly used alloy in car parts, building products, and food packaging.

Despite the impending crunch, an article from China's Global Times, published last night, isn't promising for Europe's magnesium prospects.

According to the publication, China is inclined to rollout restrictions on magnesium operations in the future — regardless of whether there is an energy shortage or not. It seems that's sending ASX magnesium miners higher today.

Furthermore, many Chinese companies have resumed operations as normal since early October. However, magnesium miners have been instructed to operate at 40% of their normal capacity.

This is likely due to the material's extremely high energy intensity needed for production. It is estimated that it takes 35-40 megawatt-hours to produce one tonne of magnesium.

ASX magnesium miners today

It seems the shortfall in supply is unlikely to be filled by China following its remarks on magnesium production. As a result, investors are speculating that ASX magnesium miners could be set to benefit from an imbalance in supply and demand.

Here are today's big movers in the magnesium market:

• Magontec Ltd (ASX: MGL) up 20.83% to 58 cents per share
• Latrobe Magnesium Ltd (ASX: LMG) up 28.3% to 6.8 cents per share
• Korab Resources Ltd (ASX: KOR) is in a trading halt pending an announcement regarding a capital raising

Korab Resources appears to be making use of the heightened interest in the sector. The $9 million company has touted a "shovel-ready" magnesium deposit near Darwin.

All eyes are on the ASX magnesium miners as to what the next move is from here.

The post Why are ASX magnesium miners getting so much love this week? appeared first on The Motley Fool Australia.

This follows reports of mere weeks' worth of magnesium available across Europe. In turn, the unmet demand has sent the price of magnesium figuratively to the moon, taking just about any publicly traded company with magnesium exposure along with it.

What is causing the magnesium shortage?

Investors of ASX-listed magnesium shares are rejoicing while the price of the element takes flight. Though, many might be wondering, what is setting this into motion? Well, the "catastrophic" shortage across Europe appears to be the byproduct of China's efforts to curb domestic power consumption.

China accounts for 87% of the world's magnesium production. This puts immense importance on the upkeep in output from the country. Unfortunately, with the reduction in industrial energy usage, China's magnesium production has been relatively non-existent recently.

In response, a joint call to action has been made across Europe's industry associations. In this online publication, it is reported that Europe is at imminent risk of production shutdowns. This is due to magnesium's essential role in being an alloy material, improving the workability of aluminium and reducing density.

In addition, Europe relies on China's magnesium exports almost entirely, typically being 95% of its supply. As a result, the entire European continent is expected to run out of magnesium stockpiles by the end of November.

If this were to occur, industry associations fear the consequences would be far-reaching. Overall, it could result in the degradation of entire European Union value chains, including end-use sectors such as automotive, construction, and packaging.

Inevitably, if unresolved, the shortage could lead to business closures and job losses.

ASX magnesium shares riding the price hike

Though the shortage is bleak, investors were today looking for companies that might rise to prominence because of the shortage.

By the end of the session on Tuesday a handful of ASX shares had caught the magnesium hype bug, these included:

• Korab Resources Limited (ASX: KOR) up 178% to 7.5 cents per share;
• Latrobe Magnesium Ltd (ASX: LMG) up 61% to 5.3 cents per share; and
• Magontec Ltd (ASX: MGL) up 50% to 48 cents per share.

Additionally, the letter pointed out that magnesium prices had reached a mind-boggling $10,000 to $14,000 per tonne. For comparison, only a year ago the price was roughly $2,000 per tonne.

The post ASX magnesium shares are going gangbusters. What's happening? appeared first on The Motley Fool Australia.