European and Global Challenges

Industry Representation before European Aluminium

The Evolution of European Aluminium

Addressing Sustainability

Aluminium in Mobility

Aluminium in Building & Construction

Aluminium in Packaging

The Faces of European Aluminium
European and global Challenges
Aluminium on the London
Metal Exchange
In 1978, aluminium was listed on the LME, which became the price reference for the global market. It was a critical change for integrated primary producers: they lost the control over market prices which had been historically stable during previous decades. From the 1980s, aluminium prices became as unstable as those of other commodities.

LME Ring © All rights reserved
Aluminium after the end of the Cold War
The end of the Cold War, with the fall of the Berlin Wall and the dissolution of the Soviet Empire, paved the way for a new globalization. This geopolitical earthquake had a direct impact on the aluminium industry, especially in Europe. In the 1990s, massive exports of Russian metal to the Western market caused a dramatic drop in LME prices. It was a major political and economic test of the European Union's ability to defend the interests of its industries.

UN Trade and Development Conférence. Study of the aluminium market in the early 1990s,
22 February 1994 © UN
The Gulf War and the energy crises
The oil crises of the 1970s and 1980s had a structural effect on the world economy, ushering in a period of high energy costs. In 1990, the Gulf War confirmed the links between oil prices and global geopolitics. The upward trend in energy prices has favoured the shift of primary aluminium production, an electro-intensive industry, to low-cost areas (Middle East, Canada, China, Russia). Successive energy shocks and the explosion of demand in emerging countries have transformed the geography of the aluminium industry.

Aerial view of Kuwait's burning oil wells (1991)
© Alamy Image Bank

Primary aluminium smelting power consumption
in thousands of GWh, 1980-2019 © IAI
The Maastricht Treaty
and the birth of the European Union
Extending the Single Act (1986), the Maastricht Treaty founded the European Union and launched the Economic and Monetary Union, leading to the introduction of the euro in 1996. The Maastricht Treaty acted as a decisive strengthening of European rules compared to national rules. The impact was enormous on markets, consumption and the orientations of national industrial policies. This new situation prompted European Aluminium to settle in Brussels, as close as possible to European institutions.

Council of the EU, From fireside chats to key decision-maker, 2017 © European Union
The Kyoto Protocol -
the affirmation of environmental issues
In 1992, awareness of environmental threats led the United Nations to adopt a Framework Convention on Climate Change (UNFCCC). In 1997, the signatories of the Kyoto Protocol committed to reducing their greenhouse gas emissions (- 5% by 2008-2012). The European Union set up the EU Emissions Trading Scheme from 2005 onwards to reduce carbon dioxide emissions.
Since 1993, European Aluminium has been a pioneer of this change, adopting the analysis of the Life Cycle of products which offers a rational assessment of their CO2 impact. In 1998, Life Cycle Assessment was extended to the global aluminium industry thanks to the initiative of European Aluminium.
Since 1997, European Aluminium has also been monitoring the industry’s wider sustainability performance and in 2002 started regularly reporting on an extensive list of Sustainable Development Indicators (SDI) related to the production and transformation of aluminium. Then, in 2010, further indicators covering the main uses of aluminium, including the recycling rates, were added.
In 2015, the Paris Agreement on Climate Change was a great success in the application of the Kyoto principles.

GHG Emissions from Electricity Use by Region,
CO2 tonnes/tonne © IAI
Newcomers, restructuring and globalization
in the aluminium industry
In 2000, the European Commission rejected a merger project between Algroup-Suisse, Pechiney and Alcan in the name of competition principles. However, the process was completed a few years later, forming part of a restructuring phase. Mergers, acquisitions and spin-offs have redistributed the cards and brought newcomers into the aluminium industry. In Europe, this has resulted in the disappearance of historical players such as VAW, Algroup and Pechiney. At the same time, privatizations let new investors enter the aluminium industry, such as Alcoa and Rusal. Finally, the spin-offs of groups integrated between their upstream and downstream activities were another significant trend.

Mario Monti, European Commissioner for Competition, 2000
© European Union
China's accession to the WTO,
a new stage in globalisation
On 11 December 2001, China joined the World Trade Organization. With the arrival of the "workshop of the world" on the economic scene, a new stage in the globalization process was reached. Chinese industry quickly asserts its industrial and commercial leadership in the global economy. In the primary aluminium sector, it participates in the redistribution of the cards to the benefit of emerging countries.

With more than half of the world's capacity, its production gradually exceeds the needs of its domestic market and its surpluses are then sold on the international scene, particularly through dumping practices and less restrictive environmental standards.

© Revelis
The subprime financial crisis
and the «Great Recession»
The 2008 economic crisis was considered the worst recession since the Great Depression of 1929. After the subprime mortgage crash, the world economy entered recession. Commodity prices plummeted, with aluminium following this general trend.

The crisis accelerated the reduction in production capacity of alumina and primary aluminium in the main European countries and a relocation to emerging countries, China and Russia in particular.

LME aluminium prices 2000-2019 © LME
A “fitness check” for
the European aluminium industry
The European Union completed a study evaluating the impact of EU legislation on the European aluminium industry, as well as how these costs affected its competitiveness from an international standpoint. This Cumulative Cost Assessment (CCA) showed a more than 10% disadvantage resulting from regulatory costs in Europe.

© European Union
Waves of neo-protectionism
in the global economy
In 2016, Donald Trump was elected President of the United States using the slogan “America First”. This can be seen as the turning point from a liberal and deregulated economy to neo-protectionism. US-China relations have been reshaped by a global trade war. In 2018 European steel and aluminium paid the price when the United States decided to set a tariff on imports of 25% for steel and 10% for aluminium.

Donald Trump with Donald Tusk, President of the European Council, during his visit to Brussels on 25 May 2017 - Photo Mauro Bottaro © European Union
Aluminium Associations address
global overcapacity
European Aluminium is firmly committed to fair rules for the global aluminium trade, which China seriously undermines. The hearings with the American trade authorities in 2016 and 2017 were followed by initiatives that challenged international organizations. In 2018, in response to the global and structural issue of Chinese overcapacity, aluminium associations from Canada, the United States, Europe and Japan launched a roadmap to a sustainable global aluminium market during the Montreal Aluminium Summit. The Canadian and Quebec governments as representatives of G7 governments actively participated. Since then, aluminium associations have continued to actively support international institutions to permanently resolve global aluminium overcapacity. Furthermore, European Aluminium was invited to join the Business 20 (B20) Trade & Investment Task Force.

© All rights reserved
European Green Pact - The Green Deal
at the heart of EU policies
As soon as she became President of the European Commission, Ursula Von der Leyen placed environmental issues at the centre of the European Union's policies. The Commission proposed a Green Deal which aimed to make Europe carbon neutral by 2050. European Aluminium has been actively involved in this Green Deal through several initiatives: the I+ manifesto, the Vision 2050 programme, and the Circular Aluminium Action Plan.

Presentation of the Green Deal © European Union
The COVID-19 crisis and
its impact on the industry
While primary production in Europe has remained stable, demand for flat-rolled and extruded products has been strongly affected by the COVID-19 crisis and the sharp slowdown in the transport and construction markets. Despite the breakdown in global supply chains, the EU’s domestic aluminium value chain has mobilized rapidly to produce goods that remain vital for Europe’s COVID-19 response. These include frames for field hospitals, respiratory machines, oxygen tanks and other medical instruments and equipment, as well as can sheet and foil sheet for the packaging of food, drinks, pet food, pharmaceutical and medical products.

At the same time, the crisis offers new opportunities for growth and green transformation. The EU has thus adopted an ambitious recovery plan with a budget of € 750 billion for research, economic cohesion and climate transition. European Aluminium set out its recommendations for a sustainable recovery of the aluminium industry and recovery measures for the automotive industry. Thanks to its unique qualities and the efforts of its industry, aluminium will play a decisive role in this transition to the green economy.

Extraordinary European Council, 17-21 July 2020.
Adoption of the European Recovery Plan © European Union