The aluminium industry is countering the dearth of raw materials for the production of the metal that is utilized in vehicle manufacturing and building supplies sends an alert for distress in supply that has propelled US prices to an all-time peak.
The biggest aluminium billet producer in the United States, Matalco has sent an S-o-S to consumers of its output slash and rationalizes supplies immediate next year amid a magnesium crisis.
Matalco stated in a letter to customers: “Difficult-to-source supplies of other raw materials and soaring natural gas prices are adding to the challenges.”
The largest primary aluminium producer of the US, Alcoa expressed their disquiet about magnesium shortage, as they observed so-called force majeure declarations by some suppliers. The Force majeure clause is a contract provision that relieves the parties from performing their contractual obligations when certain circumstances beyond their control arise, making performance inadvisable, commercially impracticable, illegal, or impossible. This is inserted in sales contracts to empower suppliers to cease deliveries owing to circumstances outside of their control.
"In the last several weeks, magnesium availability has dried up and we have not been able to purchase our required Mg units for all of 2022," Matalco said in the letter.
"The purpose of this note is to provide this advanced warning that, if the scarcity continues (and especially if it becomes worse), Matalco may need to curtail production in 2022, resulting in smaller allocations to our customers."
The two aluminium giants Matalco and Alcoa notified that silicon also has supply shortage, while this crisis is stirred by production slash in China, navigated prices up 300% in less than two months. Aluminium billets production requires magnesium and silicon to harden the alloys.
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