Chinese magnesium supply shifts to Shaanxi recently. The refineries make magnesium as byproduct of industrial complex of coal mining, coke, tar and ferrosilicon. Traditional major magnesium makers in Shanxi lose the dominating position for past 10 years. A source in Japanese industry said some of refineries in Shanxi close the plants to shift the operation to Shaanxi. The source estimates Chinese magnesium production including ingot, alloy and powder was 620,000 tonnes in 2011 as 2010. The source estimates the production was 190,000 tonnes in Shanxi, 370,000 tonnes in Shaanxi and 40,000 tonnes in Ningxia. Shanxi made around 500,000 tonnes per year of magnesium in 2005 and 2006, which represented around 90% of Chinese production. However, many of the plants closed the operation. The industry source expects Shanxi’s magnesium production is around 50,000 tonnes in 2012. Chinese major magnesium makers are based in Shanxi. The makers make magnesium by sourcing coke gas and ferrosilicon from other companies. A trading firm source said the model costs more than US$ 3,100 per tonne compared with around US$ 3,000 of magnesium market price. Shaanxi’s magnesium refining capacity is annual 700,000 tonnes. The production is expected to exceed 500,000 tonnes in 2012. Japanese industry source expects the refineries’ competition would get severe.