The European aluminium industry is in its worst shape since 1970, owing to skyrocketing energy costs and a lack of imports from Russia. Paul Voss, CEO of the European Aluminum Association (Brussels; www.european-aluminium.eu), told Bloomberg that the sector is facing an “existential crisis” and requires urgent actions before it suffers major, and possibly permanent, damage.

Annual European production capacity for aluminium is already down by 1 mn t, and according to research conducted by Wood Mackenzie (Edinburgh, UK; www.woodmac.com), about 25% of that may never be recovered.

On 17 August 2022, Norsk Hydro (Oslo; www.hydro.com) shut down primary aluminium production at its Slovalco plant in Slovakia, citing expanding energy bills. The company hopes to reopen the facility once electricity prices stabilise. On 27 September, it rolled out plans to partially curtail aluminium output at its domestic sites in Hydro Karmøy and Hydro Husnes.

Eivind Kallevik, executive vice-president and head of Norsk Hydro’s aluminium metal business, said the extraordinary situation in the European economy and energy market was causing uncertainty, noting further that demand for the company’s aluminium products is declining.

Aerobal (Düsseldorf; www.aerobal.org), the international organisation of aluminium aerosol container manufacturers, also pinpointed the energy crisis as a key challenge for the aluminium can industry, along with a lack of skilled labour. However, global shipments climbed 5.5% in the first half of 2022 to around 3 bn units on the back of rapidly increasing demand from the pharmaceutical, hairspray, and household sectors.

Despite the positive dynamics in the first half of the year, aerosol can producers have voiced concerns over a possible recession in leading markets such as Europe, the Americas, and Asia. Aerobal warned that inflation is curbing consumers’ buying power, which threatens to hinder the demand for fast-moving consumer goods such as body care products.

Aluminium foil rollers based in Europe have also expressed strong concerns about the availability of natural gas and its price dynamics, though Bruno Rea, chairman of the European Aluminium Foil Association (EAFA, Düsseldorf; www.alufoil.org) Roller Group, noted that the business environment has stabilised despite the generally difficult economic situation. In the first half of 2022, deliveries of thicker gauges – used for semi-rigid containers, technical or other applications – fell only 2% year-on-year, while the thinner gauges – used mainly for flexible packaging and household foils – witnessed a 2.3% rise. Overall, domestic sales of all gauges were 3.3% ahead.

According to EAFA, H1 exports continued to decline at the rate of 15%, the average for 2021. Overall foil demand in Europe grew 0.7% year-on-year, reaching 494,000 t (490,300 t in H1 2021).

Rea anticipates a similar development in the second half of the year, adding, however, that it depends on the overall situation in several critical areas of supply along with inflationary factors across all markets. “We very much welcome the decision by the European Commission and its member states to consider the agri-food supply chain as societally-critical in the Save Gas for a Safe Winter initiative. About three-quarters of aluminium foil deliveries are used for food and pharmaceutical packaging and related applications.”