The global aluminum market: opportunities and challenges
The energy transition pushes the demand for aluminum in the world, with an expected growth trend of 2% per year. The European aluminum system must however deal with the uncertainty linked to the supply of raw material editions at the competitive cost.
The aluminum had a very remarkable evolution, in 1920 the world annual production of primary aluminum was less than 200,000 tons and touched the threshold of 25 million tons in the early 2000s, which marked rapid growth of light metal in areas such as China and The Gulf. And it is in this period that the industry upstream of aluminum in the European Union begins a phase of decline, which is continuing relentlessly, a worrying situation of deficit of raw materials, with supply risks at competitive conditions.
On a global level in 2012 the production of primary aluminum was over 45 million tons and is a growth phase that continues until the present day. In 2022 almost 70 million tons have arrived, China alone exceeded 40 million tons and confirms the leading position.
In the last place, the EU is confirmed, with a further drop in about 1.3 million tons. The extraordinary rhythm of growth of the light growth of the last decades is evident from the data; At this passage, with an annual progression of 2%, according to the International Aluminium Institute we should touch the 180 million tons of primary product by 2050; With the growth market of the secondary market, for which an increase is expected in the next twenty years from 33 to 81 million tons, we will reach over 250 million tons of light metal demands.
However, the concern for the procurement of primary in the EU is growing, the decline of the productions is continuing relentlessly.
In the general framework of positivity, important central issues feed doubts and uncertainties about the future of the EU system system: the problems of energy and eco -sustainability, with the ambitious challenge to decarbonization, and the persistent uncertainty about trading and fair access to the raw material policies, of vital interest in small-meddies of transformers and users downstream, the heart of this industrial chain.
Eco -sustainability, recycling and green aluminium: the challenges of European aluminum production
The ambitious limits to be respected within a first step set at 2030 and the final objective of "zero emissions" by 2050 impose increasingly demanding policies, and much of the aluminum industry is at the forefront of promoting the new era of Green aluminum.
Today, more than ever, it is acknowledged that not all primary aluminum has the same characteristics, and that the energy used in the chips can be extremely different from a productive units to the other in terms of CO2 imprint, depending on the energy source. Many important companies in the world producing primary metal have begun to advertise the brands of their "virtuous" primary aluminum, capable of contributing to the containment of emissions using clean energy obtained hydroelectric or solarly and adopting innovative production technologies.
Recycling to integrate the supply and to contribute to the energy transition
Aluminum lends itself very well to recycling, aluminum scrap and its alloys can be reused without significant degrades of the metallurgical and technological qualitative levels. Today, about 75% of the entire primary aluminum product in just under 150 years is still in circulation and the scrap collection rates vary from 10% to 90% depending on the regions and products.
The recovery optimization of recycling will depend on intelligent regulatory interventions framed in a combination of new technologies and careful organizational redefinition of collaboration along the entire value chain, from the restitution systems of the deposits, to the selection phases through an efficient branched infrastructure before aluminum reaches the landfill.
The global production industry indicates as a priority interest the correct use of light metal, pushing for the rationalization of the uses of the primary itself and implementing the use of secondary production metal as possible, in response to the needs of an eco-sustainable industry, Attentive to social values, aligned with the demand for a circular economy.
Eco -sustainability for the energy transition: the problematic application of the CBAM mechanism
The European Commission has developed a new measure for carbon control at the border, the CBAM, Carbon Border Adjustment Mechanism, within a package of ad hoc fit for 55 rules, for the ambitious objective of a 55% reduction carbon emissions compared to 1990 levels by 2030 and climatic neutrality by 2050, according to the path defined by the European Green Deal. In its general lines, the mechanism provides that the importers of certain products within the EU acquires certified corresponding to the carbon price that would have been paid if the goods were produced according to the EU regulations on ETS.
In the event that an non -EU manufacturer proves to have already a carbon price used in the production of goods imported into a third country, the corresponding cost can be entirely deducted.
The CBAM could represent damage for companies that use aluminum as raw material, decreasing the competitiveness of the manufacturing with an increase in prices for final consumators; It will be a source of other problems for the supply of an essential material for many sectors, such as the automotive and transport industry in general, that of constructions, solar, packaging products, electrical engineering.
Unlike the CBAM setting, the Inflation Reduction Act Ira, a package of tax breaks and investments of 400 billion dollars (369 billion euros) to decarbonize the American economy, introduced in the USA for similar eco -sustainability purposes, represents Further and more effective approach to promote environmental safety. It provides measures that promote the reduction of greenhouse gase emissions and support for renewable energies, without creating distortions in the market. In addition, favoring innovation and technological development, offering incentives for companies that invest in sustainable solutions, stimulates the creation of new jobs in the renewable and other related sectors.
The energy node for the production of primary aluminum in the European Union
With a view to focusing on the return of primary aluminum production to the old continent, nuclear energy witted a resource to be taken into consideration for the European Union both in the fight against climate change through decarbonization, and to contribute to the reindustrialization of the old continent. The weight of energy costs in the typical cycle of primary aluminum production is well known.
The development of high -quality recycling aluminum production has undoubtedly compensated for the needs of primary metal of which the EU has now reached a risky deficit over 80% of the needs, but it is mathematically certain that the secondary will not be able to in any way fill the needs in the EU of raw aluminum in the future years. Nuclear energy offers a concrete solution to reduce carbon emissions in the atmosphere and represents a reliable source capable of supporting an efficient and effective energy transition, it can play an important role in the reindustrialization of the production of electrolytic aluminum in the EU, and can Make access to the raw material competitive by the downship, today also burdened in the EU from the irrational weight of the duty to the import of the raw.
Difficult access to the raw material: the duty to the EU raw aluminum cup is a brake on competitiveness
The duty to the import of raw aluminum, a raw material is missing in the EU for almost 85% of the factory needs of the artifacting companies, it is actually an inflationary measure, a benefit for some primary raw manufacturers and for secondary aluminum manufacturers, A category to be supported, but not with a hidden subsidy against the rest of the chain downstream.
According to the Luiss studios of 2015 and 2019, the inconceivable rate on the raw is an extracost for transformers and glutrizers downstream of aluminum in the EU, with an estimated year then between 50 and 80 euros per ton, constitutes a natural and very risky obstacle to the flow metal in the EU.
The European Commission had implemented in 2007 with the then commissioner to trade Lord Mandelson the opportunity to dismantle a tariff already not very credible in those years; But it has not evidently transposed the needs of the real EU of the EU and that silent 90% of the aluminum system composed of small and medium -sized companies of transformation, processes and manufacturing downstream, granting the pressure of the strong international lobbies that do not have the main objective Development and competitiveness of the local aluminum market in the EU.
It is difficult to understand the reasons why the path started in 2007 of eliminating an already unsustainable rate was not completed when over 3 million tons of primary rough were produced in the EU, in the face of the decisive choice of the great world primarists to disappear from the context European, and the consequent collapse of primary production in union to just over 1 million t. We expect that the decision makers in Brussels fulfill the task of defending the competitiveness of the global aluminum industry in the EU and implement the requests of representatives of 90% silent aluminum chain.
The new market distortions
This is the last chapter of unreasonable things that happen within the industrial system of aluminum in the EU. We refer to the continuous pressures for the introduction of prohibitions and sanctions to the import of the primary metal, the raw material that as we have seen we absolutely need.
These pressures appear as an additional oligopolistic attempt to forcefully extract the competitors, with the final design of putting the EU in the constituted market position, with the devastating impact that any restriction of metal supplies could have on the complete aluminum supply chain in EU.
All to the serious damage of the small and medium -sized enterprises of the downstream which constitute 90% of the workforce of the European Light Metal Industry and 70% of the manufactured, who have no official representation and whose interest have been fully trampled on fundamental issues such as the commercial policy and dialing.
Conclusions
We have examined the various factors that can affect the competitive path of aluminum chain in the European Union. We have recorded the goodness expressed by the sector in the past decades, bonds transformations and the significant prospects for growth of the global system, some of the great changes in the old continent and the consequent risks and opportunity.
It has been seen that by the industry there have been precise signals for some time and continuously about the basic needs, courageous and far -sighted choices have been missing from decision makers in themes of great importance such as energy and fair access to the raw material.
The EU downstream industry, which represents 90%of employment in the aluminum industry and about 70%of the turnover, is in constant development. The consumption of aluminum semi -finished products in the EU is gradually recovered; The major EU economies - France, Germany and Italy - in the next 5 years, according to analysts' forecasts, will require 1 million tons of semi -finished products per year more than today, to feed a manufactured artifact of thousands of thousands of companies, most of the small and medium size.
To guarantee this evolution, the EU should focus on these aspects of the development of the aluminum industry:
- ensure competitive and adequate supply of materials to the valley sector, the main part of the value chain of the sector that uses almost all of its labor;
- Avoid any interruption of the primary aluminum supply chains at low dicarbonium emissions; It is important that in the context of global crescentciority for low -content aluminum, the EU is able to retain those suppliers that help to produce products downstream that meet high standards of ecological performance and quality;
- Give the utmost attention to the preservation and modernization of the primary EU sector of the development of recovery and recycling.
Many future opportunities are open for aluminum, give it to the eco -sustainable transition. We have a great ultra centenary tradition of high technology in the development of aluminum applications and its alloys, it would be a very serious mistake not to support small and medium -sized enterprises as necessary that in the EU and Italy have made this industrial segment great in the world.
Source: A&L Aluminium Alloys Pressure Diecasting Foundry Tecniques