Risks for the EU light metal system are increasing
There is no doubt that when it comes to the aluminium system, a China issue exists, and it is cumbersome, because it comes up again and again in all aspects: in the production of primary aluminium, with a high carbon footprint metal produced in polluting plants powered by polluting energy, in the trading of semis and products, such as profiles, rolled products and aluminium wheels for vehicles, sold at less than their cost, but also in the scrap market, the precious raw material for the recycling of aluminium, which China is hoarding in Europe with commercial behaviour always at the limit and beyond. This state of affairs is already in itself a major global issue (I would like to mention that the aluminium value chain is estimated at about 1% of global GDP, i.e. about 800 billion dollars), let alone the risks for the EU, which has the commendable ambition to be a model of sustainability in all fields, and which in the specific segment suffers endemically from a serious shortage of primary metal. As regards overcapacity, China produced 36 million tons of primary aluminium in 2019, out of a world total of 64 million; demand is now contracting and if, after the Covid-19 emergency, China continues to produce primary aluminium at the same rate, even if it can absorb much less than before, it will invade the market with huge amounts of raw material with a high CO2 footprint, at a time when major world producers are focusing on green production with low-carbon hydro-electric power or, in any case, optimised to the maximum from an environmental standpoint. And it is also worth wondering whether China will keep up, as if nothing had happened, the entire production of semi-finished aluminium products, which can only be absorbed to a small extent in the domestic market, thus continuing, with increased pressure, to flood the planet with semis and products at prices below cost. Regarding production practices, according to Yves Jégourel, professor at the University of Bordeaux, and Philippe Chalmin, professor at Paris-Dauphine University, who worked under the patronage of Aluwatch, a working group dedicated to developments in the aluminium market, in China 90% of the electricity used to produce primary aluminium comes from coal. In addition, according to plans already approved, around 40% of new aluminium projects introduced in China in 2020-2023 will use coal as a primary energy source. Over the next three years, the total capacity of newly added coal-based aluminium plants in China will reach 2.7 million tonnes, significantly increasing the sector’s already very high carbon footprint. As a corollary of this datum, it should be noted that out of 10 million tonnes of aluminium products exported from China, at least 9 million tonnes are carbon intensive. Finally, with regard to commercial casualness, the recent measures of anti-dumping measures against the import of Chinese extrusions into the EU proposed by the European Commission are confirmation that China has been pursuing for years and with determination a policy of production overcapacity in the objective of a real economic war, in order to weaken European manufacturing to its own advantage. Just to give an idea of the size of the problem, we would like to point out that over the last 18-20 years the import of aluminium semis into the EU, as shown by the recordings and monitoring carried out, has grown from 20 to 50 times, mostly from China, largely in dumping conditions. All these considerations are just a quick analysis of some risk situations which should be taken into account to ensure reliable, safe and sustainable supplies of strategic raw materials and products such as those of the aluminium supply chain: few facts and an invitation to keep our eyes open to prevent our manufacturing from being flooded by materials and products exported in dubious transparency, a dangerous threat for our industry.