Amid a supply crunch caused by the Russia-Ukraine conflict, European non-ferrous metals industry association Eurometaux warned Wednesday that European zinc and aluminum smelting capacity has fallen by nearly half in the past year, and now a further spike in electricity prices could lead to more plant shutdowns in the winter.
Aluminum smelters have been hit particularly hard, Eurometaux noted, because aluminum is one of the more energy-intensive metals in the manufacturing process.
The agency explained that if the aluminum industry, which produces 65 million tons per year, were considered a country, it would be the fifth largest consumer of electricity in the world. Therefore, a further reduction in production by the aluminum industry could have a considerable impact on the overall electricity consumption in Europe.
At the same time, however, Eurometaux warns that additional production cuts will have serious and lasting implications for the region’s broader green energy goals. Aluminum’s use in light vehicles and solar cells means it holds a key position in the energy transition, and further production cuts will make Europe more dependent on supplies from carbon-intensive smelters overseas.
It is calculated that since many producers began cutting production last year, Europe’s aluminum imports have increased significantly, increasing the carbon footprint of European consumers by as much as 12 million tons per year.
The warning highlights the risks facing the industry, as Eurometaux represents miners, smelters and manufacturers employing half a million people in Europe.
The European Union has urged member states to cut gas use to avoid a sharp escalation of the region’s energy crisis in the winter months as Russian gas supplies are massively reduced or even cut off. The EU plans to reduce gas use by 15 percent, and authorities need to protect residential energy supplies while reducing the risk of lasting damage to critical industrial infrastructure.
The aluminum and zinc industries are not major direct users of natural gas, but the large amount of electricity consumed by smelters has made them bear the brunt of the energy crisis.
Guy Thiran, director general of Eurometaux, said the EU’s gas usage reduction plan makes it clear that politicians will have to make tough choices in order to protect residents and industries this winter. If the EU’s concerns about winter gas shortages and soaring electricity prices become a reality, more production facilities will be at risk of permanent closure.
He noted that any further downward movement in European metal production could become permanent and would lead to massive job losses and have a ripple effect on a number of important and strategically valuable programs.
Post time: Jul-22-2022