US aluminium producers warn billet output cut due to magnesium and silicon supply shortage

According to the report shared by the Shanghai Metals Market, energy supply constraints due to soaring prices have pushed the United States' aluminium prices to record highs and also led to the shortages of key raw materials such as magnesium and silicon, exacerbating the tight supply situation of aluminium.

Matalco Inc., the largest aluminium billet producer in the United States, has already warned customers that it might cut production and make limited deliveries as early as next year because of a magnesium shortage, reported Bloomberg.

Alcoa Corporation, the largest primary aluminium producer in the US, has also expressed concern about the magnesium shortage, and some suppliers have issued so-called force majeure statements. Force majeure clauses are attached to sales contracts, allowing suppliers to suspend deliveries.

Both Matalco and Alcoa have also pointed out the shortage of silicon supply in the market, resulting in a 300 per cent increase in silicon prices in less than two months. Magnesium and silicon are both essential alloying elements in the production of aluminium billets. Shortage of the materials can aggravate the tight supply of aluminium and aluminium price hikes as a consequence.