What actually constrained Project Habakkuk

Was Project Habakkuk cancelled mainly because its material was needed elsewhere?

No; escort-carrier priorities and the lack of a sufficiently large, strong construction site were more important constraints.

Britain could probably obtain enough pykrete ingredients if it chose to do so. Material supply was therefore not the decisive obstacle sometimes presented in retellings of Project Habakkuk. The harder constraints were the priority given to escort-carrier production and the search for a construction site strong and large enough for the enormous vessel. The project was limited by industrial opportunity cost and facilities rather than an exotic-material shortage.