In 2020 (estimate), despite the strong impacts of the COVID-19 crisis,  primary aluminium production in Europe (EU28+EFTA) remained fairly stable (-1.0%). In the middle of the crisis, primary smelters managed to be resilient and, generally, avoided disruptions as much as possible: the costs of idling a smelting pot or temporarily closing a smelter is very high. Thus, if smelters close, there is a risk that they will not reopen.

The production decrease was more significant for EU28 smelters than for EFTA countries. After the closures of two smelters in EU28 in 2019, some of the remaining smelters in EU28 are still at risk of closure especially in the context of the aftermath of COVID-19.   

For 2021, we expect this situation to improve with any recovery from the pandemic, and in spite of the fact that trade issues will continue to be a key challenge for aluminium production in Europe.

* Note: All our 2020 statistics for the EU still include the UK (EU28). "2020e" statistics are estimates. 

Last year, in the context of the COVID-19 pandemic, EU imports-dependency (of aluminium ingot requirements) slightly decreased to reach 47% vs almost 50% in the previous years. Norway and Iceland, while being part of the economic area with the EU, are the largest exporters of primary aluminium to the EU. Other major exporters to European countries are Russia, the United Arab Emirates and Mozambique. Domestic production is fulfilled through primary production and recycled production.

In 2020 (estimate), despite the COVID-19 crisis, EU exports of aluminium scrap (HS 7602) decreased by only 6.5%. Asia still represented about 80% of EU aluminium importers, principally China, India and Pakistan. EU28 exports to China decreased strongly (-37%) due the implementation of new Chinese legislation banning waste and scrap. However, EU exports to some other Asian countries continued to grow: South Korea (+68%); Thailand (+65%) and Malaysia (+34%). In total, in 2020 (estimate), the EU28 again exported more than 1 million tonnes of aluminium scrap.

In 2020 (estimate), the COVID-19 crisis tremendously affected the European market for semi-fabricated aluminium (products obtained from the processing of aluminium ingots which must undergo further processing before being used in final applications).

The demand for flat rolled products (FRP) dropped by almost 11% in 2020e as most end uses markets were negatively impacted. The transportation market was one of the most seriously affected by the economic slowdown, resulting in the closure of several Original Equipment Manufacturer’s (OEMs) plants during the peak of the COVID-19 crisis. Demand for both flat rolled products and extrusions for the transportation market dropped by almost 30% in the first months of 2020. Conversely, the FRP market for packaging applications remained quite resilient, even during last year’s COVID-19 peak, with some markets even seeing growth.  

The aluminium industry has played an important role in supplying value chains that have been essential throughout the crisis: food packaging, critical infrastructure and medical instruments and equipment, for instance.

The extrusions market was deeply affected by the downturn of end-use markets (transport/automotive and building/construction) because of the COVID crisis, leading to a dramatic 13% decrease in demand. A rebound of the extrusions market is expected in 2021 but this will not be enough to recover from the effects of the crisis and reach 2019 demand levels again.

When it comes to trade, EU28 imports of semi-finished products decreased by 20% for Flat Rolled Products and by 10% for Extrusions in 2020 (estimate). However, in many cases, importing countries gained market share versus EU28 producers as imports decreased less than production. As an example, EU28 extrusion production decreased by 13% in 2020e.

Looking at the details, in 2020 (estimate), despite a decrease of EU28 imports from China of 38% for FRP and 19% for Extrusions, China is still the largest importing country for the EU related to semi-fabricated (or finished) products.

The Chinese share of imports decreased from 27% to 20% for FRP and from 37% to 34% for Extrusions between 2019 and 2020. The decrease is mainly caused by the European Commission’s anti-dumping investigation into Chinese imports of semi-fabricated products. This has already resulted in the introduction of anti-dumping measures on imports of Chinese extrusions from mid-October onwards.

However, as China is not a market economy this will remain an important challenge for the European aluminium industry for the foreseeable future.

Last year, in the context of the COVID-19 crisis, Chinese exports of aluminium products (i.e., HS 76) to the EU28 decreased for the first time since 2013. Despite this severe decrease of Chinese exports to the EU for most aluminium trade codes in 2020e, it remains the case that for some aluminium codes (e.g., HS 7604+7608+7610), the decrease of Chinese exports to the EU was lower than the decrease of EU domestic production.

Moreover, China’s economic recovery from the pandemic appears to be quicker than in other regions (especially Europe). It is likely, therefore, that Chinese exports will bounce back to their previous levels more quickly and this will continue to increase the pressure on European producers.