Summary:
This article talks about China is going to increase its supply in magnesium over the next 5 years. Initially, China's annual capacity of magnesium is usually around 130 million tons per year. Now the project to produce 300 tons per year was approved by the government and this will continue for the next 5 years. Ningxia, Shanxi, and Shaanxi are one of the largest magnesium-producing industries in China. The magnesium production capacity of Ningxia is usually around 18 tons and China plans to double the capacity to around 40 tons. At the same, since capacity expansion is increasing, it will take more time to produce the magnesium which means it will slow down the export rates from approximately 70% to 59%. However not everyone agrees with the idea of increasing the capacity of producing magnesium. A magnesium industry requires appropriate measures to make upgrades to the industry. Since magnesium industries produce magnesium very fast and there are too many private operators, the efficiency of the operation of is not very high. Every year, China uses 50% of magnesium and aluminium as steel desulfurization during the production process and also since many magnesium industries are growing and developing, our magnesium supply will keep on increasing. Worldwide, 70% of the magnesium is used as alternative material for aluminium or plastic in automobile manufacturing and 20% of the magnesium is used for making computers and any other electronic devices.
Connection:
In this article, there was an increase in demand caused by an increase in technological changes resulting in a increased price and an increase in quantity exchange. By looking at the statistics of the usage of magnesium, we can tell that the demand is really high. Magnesium also attracts many people because it is a very popular investment and magnesium is a necessity to certain kinds of people. Also, with the consistency technological changes, manufacturers require magnesium to create electronic devices and automobile industries use magnesium to create cars. Some people may consider magnesium as an elastic product but at the same time, some people may consider magnesium as an inelastic product. For example, manufacturers who create computers or any other electronic device will consider magnesium as an inelastic product because magnesium metal is required and a necessity to make computers and any electronic devices. Our demand for new technology will greatly affect the supply of magnesium because the more technology we demand, the more magnesium we require to make the electronic devices. Therefore, a slight change in price of magnesium will not affect the demand for magnesium. However, consumers may consider magnesium as an elastic product because they do not use or rely on magnesium for anything or they don’t consume magnesium as an essential mineral in their diet to build up their body structure to become healthier. There are many close substitutes for magnesium, so if the price increases for magnesium, consumers can easily go to its alternatives and find something cheaper that can replace magnesium. Therefore, a slight change in price of magnesium will greatly affect the demand for magnesium by ordinary consumers.
Reflection:
In my opinion I think increasing the annual capacity of magnesium is an excellent opportunity for us to increase the supply of magnesium since the amount of magnesium consumed is very high each year. We can expect that the amount of magnesium consumed every year will keep increasing, so that’s why it is a good idea to build up supply and avoid the problem of having magnesium being a scarce mineral in the future. Also expanding the industries will show signs of prosperity in the economy and it may attract people to make investments in magnesium. In my opinion I think magnesium is important for everybody because magnesium can also be used as an essential protein that gives people nutrition in their diets. Therefore, I believe that magnesium is an inelastic product because magnesium is important towards human health and I consider magnesium a necessity to survive. Also, humans only need small amounts of magnesium in their body structure, so even if there is a slight change in price, it won’t greatly affect the demand for magnesium. I also believe that technology would keep on advancing and become newer in the future. This indicates that we need to produce more magnesium, since we need a lot of magnesium to produce new technology and electronic devices. Therefore, I support the idea of increasing the capacity of magnesium produced each year.
