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E c o n o M i c s
Major trends in the European aluminium industry
This paper is based on a presentation
given by Patrick de Schrynmakers,
Secretary General of the
European Aluminium Association
(EAA), during a press conference
at the Aluminium trade fair in
Essen on 24 September 2008. It
highlights some major trends in
the European aluminium industry.
EAA represents the whole of the
European aluminium value chain
– from bauxite, alumina, electrolytic
metal, recycled aluminium
as well as aluminium lamination,
extrusion and wire drawing.
Although the industry is continuously
restructuring, a number of major
trends have been apparent recently:
1.) The consolidation of large integrated
aluminium companies and/or
the creation of pure aluminium players:
some recent examples in Europe
are the take­over of Péchiney by Alcan
in 2003 and the split of Hydro’s
oil and aluminium activities in early
2007. But much more spectacular
is the emergence of large integrated
companies from Asia: the Indian company
Hindalco took over Novelis (the
former rolling assets of Alcan); in addition
to its strong upstream position,
China’s Chinalco is consolidating
most large Chinese rolling mills.
2.) The split between upstream
and downstream activities in Western
countries: Rusal sold its downstream
activities before merging with Sual
and some of Glencore’s activities in
2007. More recently, soon after having
taken over Alcan, Rio Tinto announced
the divestment of its two
downstream business groups, i. e.
Packaging and Engineered Products.
3.) The subsequent emergence of
large downstream players such as
Aleris, which took over Corus Aluminium’s
downstream assets, and Sapa
Profiles, a result of the joint venture
between Sapa’s profiles extrusion
business and Alcoa Soft Alloy Extrusions.
These trends will doubtless continue,
and will not be limited to the
world of aluminium, the best example
being BHP Billiton’s bid for Rio Tinto
Fig. 1
Alcan in order to create a world mining
and metals giant.
Concerning recent developments
on the metal front, the apparent
growth of the metal inventories in Europe
is mainly the result of the lack of
cash resulting from the financial crisis.
Investors and funds had bought
significant quantities of aluminium as
investments, and those quantities disappeared
from the statistics, as they
were hidden stocks. However, those
investors have now sold their aluminium
on the official market because
they needed cash, and as a result this
has artificially blown up the official
inventories, resulting in false signals
of a decrease in demand.
Fig. 2
Global aluminium industry in 2007
The global aluminium industry
and the European dimension 1
As can be seen from Fig. 1, Europe
represents about three percent of the
world’s bauxite production (approx.
190m tonnes). The remaining European
mines are located in Greece,
some eastern European countries and
Turkey.
European alumina production
is about ten percent of total world
production and primary aluminium
is 14 percent of world production.
In the following diagrams, one needs to make
a distinction between EU-27 and Europe which
is EU-27 plus EFTA countries plus some former
eastern Europe countries plus Turkey.
Global market: aluminium use by GDP
Sources: EAA, AA, JAA, ABAL, CIA facts
Diagrams: EAA
14 ALUMINIUM · 11/2008