Tough Times for Aluminum

Due to excess capacity and constantly increasing price pressure endangering their business, European aluminum suppliers are growing uneasy. The companies blame China for their misery and accuse Chinese firms of flooding the global market with millions of tons of the metal at dumping prices.

“The European aluminum industry is looking to China with some concern,” said Emilio Braghi, head of European operations for the aluminum producer Novelis. “We have to take care to protect ourselves in the right way.” This applies to both primary production and the downstream area, i.e. further processing into semimanufactured products. Mr. Braghi fears that excess Chinese capacity could threaten the very existence of the European aluminum industry, just as was the case with the steel sector.

“China’s free capacities would be enough to meet all of Europe’s needs,” Mr. Braghi said. “And production in China is being massively extended.” The country’s primary production is already five times greater than European output. According to the industrial association Wirtschaftsvereinigung Metalle, primary production of aluminum in China reached 31.7 million tons in 2015. There are no concrete figures for the degree of excess capacity; the amount is estimated to be around 6 million tons. In comparison: global aluminum production reached around 58 million tons last year; Europe’s share was 7.6 million tons.