US Aluminium Companies Warns Possible Output Reductions Next Year

SHANGHAI, Nov 16 - Supply constraints caused by soaring energy prices have almost pushed US aluminium prices to record highs, while increasing shortages of key raw materials such as magnesium and silicon metal have further exacerbated the tight supply situation of aluminium.

Matalco Inc., the largest U.S. producer of aluminum billet, warned customers on Wednesday that it could cut production and make limited deliveries as early as next year because of a magnesium shortage, Bloomberg reported.

Alcoa Corp., the largest producer of primary aluminium in the US, has also expressed concern about the magnesium shortage, and some suppliers have been issuing so-called force majeure statements. Force majeure clauses are attached to sales contracts, allowing suppliers to suspend deliveries due to circumstances beyond their control.

Matalco and Alcoa both pointed out that silicon was also in short supply, which led to a 300% increase in silicon metal prices in less than two months.

Magnesium and silicon metal are both essential alloying elements in the production of aluminium billets, and the shortage of these materials will exacerbate the tight supply of aluminium, which could drive aluminium prices further up.