AlCircle is honoured to have Dr Mario Conserva giving his views and opinions of the European aluminium market. Dr Conserva is associated with the aluminium industry since 1963 and now the President of the International Aluminium Exhibition METEF, Cofounder and General Secretary of Federation of Aluminium Consumers in Europe (FACE) and General Director of the International Magazine A&L Aluminium and Alloys. He also serves EAC Edimet Aluminium Consulting Srl as a Chief Executive Officer. Let’s hear from him.

AlCircle: Could you please share your views on the overall market trend in the European aluminium industry this year?

Dr Conserva: The Italian aluminium market had a substantial and significant recovery last year, with an overall record of metal use of approximately 2.3 million tonnes for per capita consumption in the various segments over 40 kg, one of the highest values in the world.

Robust performance in the field of extrusion and rolling but less brilliant was the picture of the cast foundry due to known problems linked to the drop in demand in the automotive sector. Good performance in 2021 in the general framework but the future prospects in Italy and Europe look like a serious concern due to great uncertainties of raw material supply for the primary metal production and unresolved problems of energy costs. 

AlCircle: How do you think the European aluminium industry be able to combat the power crisis in 2022?

Dr Conserva: The European system of energy production will necessarily have to carry out profound interventions to convert to the use of renewable sources in Italy. For example, the interventions will have to cover more than 60% of the total annual consumption, which is over 360 TW. It is known that interventions of this kind are made mandatory in order to ensure the local manufacturing system reaches carbon neutrality by 2050. The objective is clear and simple, but the path might not be easy as extraordinary efforts would be required in research and development for new solutions. Already, a lot of time has lost, and a political vision capable of interpreting the new scenarios was lacking.

AlCircle: Please share you projection on the demand-supply scenario in the European aluminium market after domestic production cuts for power crisis.

Dr Conserva: To a large extent, the European Union is dependent on China for the primary aluminium supply because of the continuous decline in primary metal production in Europe. I recall that after the latest cuts in the EU, less than 20% of primary metal is produce of what is required to feed the downstream aluminium sector. The world scenario suggests a significant global primary aluminium deficit for the short term period, creating serious problems for the whole aluminum system of our old continent. I think we will have to resign ourselves for some time to considering the exceptional situations we are experiencing almost normal. In any case, European decision-makers will have to come out and take decisions, which they never had the courage to take, even in the face of the obvious gravity of the situation, denounced for almost twenty years not only by FACE but by all the main analysts, to restore competitiveness to the excellent aluminium downstream in EU. We are facing epochal changes, and putting our heads in the sand is not only a mistake but a serious fault towards the tens of thousands of small and medium-sized companies in the downstream aluminium sector.

AlCircle: Being the General Secretary of the Federation of Aluminium Consumers Europe FACE, could you please throw some light on the initiative of the federation in reviving the European aluminium market in 2022?

Dr Conserva: The downstream aluminium industry in the EU faces the risk of having to face the most difficult and severe conditions ever. So, our attention as Face is naturally turned to the large and varied downstream system that are the small and medium-sized companies at the heart of manufacturing. The danger is the increase of aluminium input costs due to the lack of structured European duties on raw materials, which we have to import and which, due to the customs tariff, has a higher cost for European processors and users. The status quo of tariff structures for the import of raw metal into the EU, loudly requested by the few who have benefited from this hidden subsidy for years, creates a situation that is beyond logic, creates extra costs for our manufacturing for billions of euros a year, leading to the loss of competitiveness and limitation of resources to grow with research and development to the true backbone system of aluminium in the EU.

AlCircle: Any further downturns do you foresee in the European aluminium market for power crisis and geo-political rivalry between Ukraine and Russia?

Dr Conserva: As regards to the EU aluminium market, it must first be emphasized that at least good results are achieved in terms of recovery and recycling efficiency. It is necessary to acknowledge this virtuous behavior. At the same time, it is equally necessary to remind many dreamers that even the most efficient recovery and recycling of old and new aluminum scrap cannot make up for the lack of primary aluminum in the EU, a shortage that will become increasingly serious with the predictable increase in global metal consumption.

As far as the consequences of the ongoing conflict on aluminium flows in the EU are concerned, I just have to remember that over the last few years, Europe and Italy have been the usual importers of Rusal's primary products, to an extent between 10 and 20 per cent of the relative requirement. In this current scenario of critical global metal balance, the possible replacement of this metal would create serious, if not very serious problems.

AlCircle: As the global aluminium extrusion market is showing a sign of improvement, how do you think the European aluminium industry will contribute to the growth?

Dr Conserva:  I will limit myself to repeating what I have been arguing for years that the European aluminium industry in the field not only of extrusion but in general in the transformation, processing and final uses of metal, as well as in that of plant engineering and applied technologies, has made school throughout the last century and beyond, and constitutes a precious reservoir of technical culture. The latest METEF 2022 Innovation Award, which ended with great success last week, is an excellent demonstration of this. We must  remove the handbrakes from the EU downstream aluminum, like the extra costs of the duty on raw metal, we absolutely avoid a new useless and very heavy possible burden represented by the CBAM as proposed by the EC, we help the downstream to establish correct and lasting cooperation relationships with the large extra-EU producers of good primary metal with a low carbon footprint, so we will work to encourage the growth of the whole system and return to being the innovative pioneers we have been for decades.

AlCircle: From your 60 years of experience in the aluminium industry, what advice would you like to give to the European smelters for sustainable production?

Dr Conserva: This is a question to which it is difficult to give a serious answer. All of us who have been engaged in the aluminum field of work would like to see in every country a complete and efficient metal chain from the production of raw metal to the final uses. What has happened in Europe in recent years has shown that the poor duty on raw material has defended nothing, did not defend the smelters, and the primary production capacities are now reduced to a minimum, the only effect obtained was that of lowering the downstream system competitiveness. Perhaps we had to think in time to tackle the energy problem, rather than continuing to steal resources from transformers and end users by artificially keeping the bar of the cost of raw materials higher with the unreasonable duty on raw materials.