How to Invest in Magnesium Stocks

What drives magnesium supply and demand?

Demand for magnesium has grown steadily in recent years, driven largely by the car parts industry, where magnesium is used for die casting. Specifically, magnesium can be found in components like car steering wheels and support brackets.

According to IndustryARC, the CAGR in the global magnesium metal market is expected to average 6.7 percent between 2022 and 2027 to reach US$7.5 billion. In the forecast period, the firm expects magnesium alloys to display stronger market growth over more traditional uses such as steel desulfurization. This is mainly due to environmental pressures as vehicle makers view alloys as a means of reducing vehicle weight and, in turn, emissions.

China is experiencing the greatest growth in market share versus the rest of the world. It is the largest global vehicle market, and the Chinese government has predicted that its automobile output will reach 35 million units by 2025.

In terms of supply, magnesium is the eighth most abundant element in the Earth’s crust and the third most abundant element dissolved in ocean water. Around 87 percent of magnesium production in the world comes from Chinese mineral deposits. Other major high-purity magnesium-producing countries include Israel and Russia; Russia also holds the highest magnesium compound reserves in the world at 2.3 million metric tons.

How to invest in magnesium stocks?

As with many other critical metals, there is no formal magnesium market. For that reason, it is difficult to gain exposure to the metal. However, one way to do so is to invest in magnesium mining companies.

A few options are below; all companies are listed on Canadian, US and Australian exchanges:

• Inomin Mines (TSXV:MINE)
• Latrobe Magnesium (ASX:LMG)
• Karnalyte Resources (TSX:KRN)
• Korab Resources (ASX:KOR)
• Magontec (ASX:MGL)
• MGX Minerals (CSE:XMG,OTC Pink:MGXMF)
• Western Magnesium (TSXV:WMG,OTCQB:MLYF)
• West High Yield Resources (TSXV:WHY,OTC Pink:WHYRF)