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Changing dynamics in the European aluminium markets after the Brexit revolution- A talk with Maurizio Sala, President, Amafond (Italian Foundry Suppliers’Association)
Interview28/Jun/2016AlCircle.comWe agree that “the UK’s decision to leave the EU has sent shockwaves through the continent, and the secondary aluminium industry has no idea how this decision will affect business – even among those in the UK who voted for Brexit”. Industry participants across Europe echoed these sentiments espressed by Maurizio Sala, President of Amafond ( the Italian Foundry Suppliers’ Association ). A first view on the general situation lead us to see that both scrap dealers and secondary aluminium ingot producers sell into Europe, while manufacturers on the continent sell large volumes of products into the UK. Sales of both metal in Europe and cars in the UK could be affected by the leave decision, with consequences from the start to the end of the value chain.
In the UK, a straw poll conducted by Metal Bulletin on Wednesday showed that 60% of respondents planned to vote to remain in the EU and just 20% were committed to voting to leave.
Maurizio Sala has just been elected as new president of AMAFOND, one of the most active business associations in the European downstream aluminium industry.
Some decades ago he was the general manager for the Italian market for Foseco, a top player among suppliers in the metallurgic industry in Europe. As a result of that experience, he then became an entrapreneur and in 2002 he founded Foundry Ecocer srl, an Italian company operating in the field of products for foundry of non-ferrous alloys. Foundry Ecocer became also an effective, specific consultant in the field of integrated industrial process for the production of metals.
AlCircle: You have just been appointed as President of one of Europe’s most relevant Business Associations in the aluminium industry. Furthermore, you are a member of the Board of Face, the Federation of Consumers in Bruxelles. What consequences do you expect Brexit might have in the markets of primary and downstream aluminium?
Maurizio Sala: I don’t see immediate heavy consequences for the premium of Primary Aluminium, as prices are likely to stop falling in a few weeks. I think that prices continuity and reliability will be verified over the next few months. Of course, prices are set by the market in the end.
AlCircle: What do you assume the panorama of global markets will be and what would be the next moves of your association Amafond?
Maurizio Sala: Amafond has been fully committed to the internationalization of its Associates for many years. Through a close relationship with the Mise, Mae and ICE agency, Simest, Sace and the main Chambers of Commerce, our Association has always tried to implement all the tools and possible roadmaps of internationalization, with a particular focus on the downstream aluminium and automotive markets.
AlCircle: Are your associates making their main profits in Italy?
Maurizio Sala: Not at all. The new foreign markets are now relevant and becoming the main markets for the Italian companies in the industry. For instance, as a result of the cancellation of sanctions against Iran that took place at the beginning of this year, all the existing difficulties will be overcome. And next July the European Community might finally decide to lift sanctions against Russia, a country that used to be strategically important in the sector and was indeed one of the main foreign markets for Italian companies.
In the last year (2015-2016) Amafond organized promotional activities in Germany, Russia, China, Indonesia, Mexico, the USA, Turkey, Brazil and Poland.
AlCircle: In your inaugural speech as president of Amafond last June 16th you highlighted that the Middle East is a major producer of aluminium with a production output expected to rise from 5 to 7.5 million tonnes. What other areas of the world do you see as big markets?
Maurizio Sala: Apart from China, which stands as a context aside, the Middle East will soon become the world’s largest primary aluminium manufacturer. They have understood that it is far more profitable to obtain power from oil and use it in high-energy consuming metal casting process – whose demand is increasingly growing. It is therefore economically more convenient to use oil as a source of energy to help the development of local industrial production than simply selling crude oil barrels.
Primary aluminium will be produced only in areas with a large availability of low-cost energy, which is the reason why Europe is to be left completely out of it.
However, Europe – and chiefly Italy – maintain a leading position in the industry of top quality, technologically advanced non-ferrous foundry.
AlCircle: Are there any relevant news in terms of innovation for foundry products and technologies? In particular, how do you collaborate with the automotive industry?
Maurizio Sala: Very important novelties are soon expected for the automotive sector, where aluminium is increasingly used for vehicles’ structural components and car body. In particular, since a major change is expected in terms of ways of using vehicles, increasingly performing alloys will be needed.
The outlook for the future is that the advent of electric car engines will mark a revolutionary shift for the industry.
(Interview covered by Art Valley, a strategic advisory firm based in Milano and Dubai, on behalf of AlCircle.)
Disclaimer: “The information presented herein is neither intended nor implied to be a substitute for professional advice. The views and opinions shared in the interview section of www.alcircle.com are unique to the interviewees and do not necessarily reflect the viewpoint of www.alcircle.com.”
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