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Many aluminium smelters in Europe have started to shut down production due to energy prices
Overseas electrolytic aluminum supply shortage intensifies
European aluminium smelters have lost about 800,000 tonnes of electrolytic aluminium due to the energy crisis
In 2021, Europe produced 7.47 million tons of electrolytic aluminum, accounting for 11% of the global total. According to the International Aluminium Institute (IAI), There are now 36 aluminium smelters in Europe, 15 in the European Union, 10 in the European Free Trade Association, one in the UK and 10 in Russia. The total output of Europe’s electrolytic aluminum in 2021 was 7.468 million tons, second only to Asia, with Russia accounting for the highest proportion, about 48% of the total output of Europe’s electrolytic aluminum.
Since the fourth quarter of 2021, the cumulative reduction of electrolytic aluminum in Europe has exceeded 800,000 tons. Since the fourth quarter of 2021, a total of eight European countries have seen reductions in electrolytic aluminum production. Five aluminum plants in France, Romania, Slovakia, Slovenia and Germany will reduce production, while three plants in Spain, the Netherlands and Montenegro will shut down. The reduction or closure of eight smelters is directly or indirectly linked to power prices. The reduction affects a total capacity of 848,000 to 876,000 tons of electrolytic aluminum in Europe, accounting for 10% of the total European production and 1.3% of global production.
European aluminium companies have cut production several times this decade because of cost concerns. The production cut in the fourth quarter of 2021 was the third major reduction in European aluminium this century. The previous two, in 2008 and 2012, were also related to high energy prices. From 2008 to 2009, four smelters cut production due to the EU’s ban on granting power concessions to state-owned enterprises, and one smelter cut production due to low prices, reducing 1.437 million tons of electrolytic aluminum. During 2011 and 2012, two aluminum plants reduced production due to electricity price pressure, and then stopped production in 2019. 1 aluminum plant closed due to low carbon policy pressure; A total reduction of 735,000 tons of alumina.
Rising energy costs are the main reason for the decline in European aluminium production. According to IAI, electricity accounts for 40 per cent of Europe’s electrolytic aluminium production costs. European natural gas prices have risen significantly since 2021, with a 550% year-on-year increase in December 2021. The surge in natural gas prices has led to a rise in electricity prices in Europe, and aluminium smelters have seen their electricity costs rise significantly. European gas prices have retreated slightly since 2022, but remain high.
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