Matalco warns of magnesium shortage, potential impact to 2022 aluminum billet output

Matalco issued a letter Oct. 13 notifying its customers and business partners of the potential impact the current magnesium supply shortage could have on its aluminum billet production in 2022.

"In the last several weeks, magnesium availability has dried up, and we have not been able to purchase our required magnesium units for all of 2022," Matalco President Tom Horter said in the letter seen by S&P Global Platts.

"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 allocations to our customers."

Horter said the aluminum producer will continue to source as much magnesium, and other vital inputs such as silicon, as possible to maintain its planned production goals for 2022. Still, its customers should plan ahead if supplies continue to tighten, he added.

"We will provide an update in a couple weeks," Horter said. "In the meantime, you may want to consider letting your customer base know of this silicon and magnesium availability crisis and also let them know that other products or inputs needed for making billet or slab may also reach a crisis point."

While magnesium represented the most immediate concern, Horter said the supply situation for silicon, natural gas and other additives showed "signs of serious tightening" due to challenges with energy, shipping and labor.

Silicon and magnesium are used as alloying elements in the production of aluminum billet and slab.

"These 'hardeners' for our products are essential as we cannot produce products without them," Horter said.

Canada-based Matalco currently produces about 1.15 billion lb of aluminum billet and log across five locations in North America. In March, the company said it was planning to increase its nameplate capacity to about 1.5 billion lb in 2022 with the start of production at its sixth location in Kentucky.

Matalco produces 6000 series aluminum products for the extrusion and forging manufacturing industries.