There's a vast shortage of crucial raw materials

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There's a vast shortage of crucial raw materials

- There s a vast shortage of crucial raw materials for aluminum used to make automobiles and building supplies that threatens to worsen a supply squeeze that has already pushed U.S. prices near all-time highs.

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None What the front line of U.S. Matalco Inc. warned customers that it can curtail production and ration deliveries as soon as next year amid a magnesium shortage.

A challenging supply of other raw materials and rising natural gas prices are adding to the challenges, Matalco said in a letter to customers obtained by Bloomberg News.

Alcoa Corp., the largest U.S. manufacturer of raw aluminum, also voiced concerns about magnesium scarcity and has been seeing so-called force majeure declarations by some suppliers. Force-majeure clauses are embedded in sales contracts to allow suppliers to suspend 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 stated in the Oct. 13 letter. The purpose of this note is to provide this advanced warning that Matalco may need to reduce production in 2022 if scarcity continues and especially if it becomes worse, resulting in allocations to our customers. Matalco and Alcoa both reported that silicon is also in short supply. This shortage, triggered by production cuts in China, sends China's prices up 300% in less than two months. Aluminum billets can t be produced without magnesium and silicon, essential hardeners for alloys.

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