Since the fall of 2021, with the electricity surge, exacerbated since the start of the war in Ukraine in February, Europe has reduced its aluminum production by one million tonnes, or 50%, and by half also for zinc, indicates in a joint letter signed by 40 bosses of European companies in the metals sector, sent by the Eurometaux association.
“Prevent permanent job cuts”
The area “has been forced to make unprecedented production cuts over the past 12 months, and we fear that next winter will deal a decisive blow to many of our businesses”, continues the letter. The text asks the EU “to take emergency action to preserve these industries and prevent permanent job cuts”. It is signed in particular by the bosses of Ferroglobe in Spain, Intals and Safimet in Italy, Aurubis and Elektrowerk Weisweiler in Germany, Aluminum Dunkerque, Constellium and Trimet which have factories in France, AMAG in Austria, ReAlloys and ZGW Boleslaw in Poland, OFZ in Slovakia, Vimetco Alro in Romania, European Aluminum in Belgium, WargonAlloys and Elkem in Sweden, Hydro in Norway, Holding KCM 2000 in Bulgaria, or Mytilineos in Greece. In addition to aluminum and zinc, manufacturers of silicon and ferrous alloys are also affected. As well as the copper and nickel sectors.
” The war (in Ukraine) has become an industrial war, everything is connected, industrial chains are being undermined one after another”, one of the representatives of Eurometaux told AFP. Some of these bosses had to close their factories, strangled by the excessive cost of gas or electricity. Everyone fears this “industrial warfare” looming and asking Europe for help together. Indeed, an extraordinary summit of the European Union on energy is being held this Friday, giving these 40 bosses the opportunity to “sound the alarm on the worsening energy crisis in Europe”.
A price of electricity and gas multiplied by ten
Dependent for some of them on Russian gas which is drying up in Europe, and exposed to a price of electricity and gas multiplied by “more than ten” since last year, they lose competitiveness, worry about“an existential threat” for their future.
This threat comes at a time when metals are becoming strategic to ensure the energy transition. According to the International Energy Agency (IEA), global metal consumption is expected to increase by 45 million tonnes by 2050, and up to 75 million tonnes if ambitious climate policies are decided upon.
Copper, aluminum, lithium, or nickel conduct or store electricity in automotive batteries or wind turbines. And must facilitate the abandonment of fossil fuels that emit high levels of CO2.
At the same time, outside Europe, increases in aluminum production are announced almost everywhere among competitors who smell the windfall, in Brazil, Argentina, Australia, India, China and the United States, industrial. Even in Russia, where the giant Rusal has just launched production at a factory in Siberia, they point out.
750,000 tonnes of zinc could not be produced
Mirroring this, the text details the production stoppages or plant closures announced on the European continent. For zinc, the 9 smelters that exist in Europe have seen production declines this year. Goldman Sachs estimates the volume that could not be produced at 750,000 tonnes, ie 45% of total European production.
For aluminium, Europe lost 1 million tonnes. In the Netherlands, the only Dutch producer of primary aluminum Aldel has completely stopped production. The American Alcoa has announced production cuts for two years at its San Ciprian site in Spain, and cut its production at Lista in Norway by a third. Alro, the only producer in Romania, has reduced its production by 60% and only 2 of the 5 production units are operating in 2022. In Slovenia, Talum has reduced by a third since the end of 2021, as well as the Trimet foundries in Hamburg. Those in Essen have cut their capacity by 50%. Finally, in Slovakia, the Slovalco Hydro plant, which produces 120,000 tonnes of aluminum per year, has been completely closed since the beginning of September.
(with AFP)