On April 25, at the 2024 SMM (19th) Aluminum Conference and the First Aluminum Industry Expo - Aluminum Sheet, Strip and Foil Industry Development Forum hosted by SMM, Marian Scheffer, Market Analysis Manager of Aluminum and Recycled Aluminum at Hydro Aluminum, shared the European aluminum and recycling market and development.
Global aluminum
Global aluminium recycling to meet future demand
China's Primary Capacity Growth Slows: Capacity caps appear to be holding steady, with the latest output growth being a "last-ditch effort".
China plans to peak carbon emissions by 2023 after a summer power shortage affected Yunnan's production of electrolytic aluminum.
Most of the new capacity will be in Asia and the Middle East: the vast majority will be based on fossil fuels.
Europe
Recycling has a large share in Europe: post-consumer scrap is expected to grow the strongest.
High energy prices have led to widespread refinery cuts: 1.3 million tonnes (or 50%) of EU primary commodity production has been cut since 2021
Smelter cuts in Europe and the U.S.: Europe has cut smelter production by 13 million tonnes so far.
European imports have increased in recent years: the decline in Russian imports has led to an increase in imports from the Middle East and India.
What is the impact of the Russia-Ukraine conflict on production/trade?P1020 Russian exports increase – total VAP exports to these countries decrease.
LME inventories have been relatively stable in recent times – with the majority of new deliveries coming from Russian metals
The scarcity of green
Higher EV adaptability is driving demand for (green) aluminium
OEMs' decarbonization targets translate into significant demand for low-carbon aluminium
Whole Value Chain Emissions Curve:
Including alumina and other value chain emissions will reduce global production of green primary commodities from 18 million tonnes to 7 million tonnes.
CBAM can have global, regional and local impacts: climate, jobs, autonomy
What is CBAM? A carbon wall around Europe?
1. Climate tools: Extend ETS to imports
The EU importer pays the CBAM and the EU consumer bears the cost.
2. Industrial Policy: Prevent carbon leakage
Level the playing field and allow companies to recoup their carbon costs.
The CBAM puts carbon pricing on imports from six energy-intensive sectors: steel, concrete, aluminum, hydrogen, fertilizers, and electricity.
Carbon footprint of aluminum
The CBAM charges from 2026: strict verification requirements
Only the effective carbon price paid in the country of origin under the CBAM rules is recognized.