Italy's aluminium scrap imports hold steady driven by rising demand from remelt rolled product manufacturers

Italy is the second largest aluminium market in Europe just after Germany with consumption amounting to 2 million tonnes per annum. As pointed out by Mr. Fabrizio Ciampoli, CEO of All Metal Services, Italy, in the recently held Aluminium and New Materials roundtable at the Bengal Global Business Summit in Kolkata on January 20, the European nation produces zero primary aluminium but boasts a secondary aluminium production volume of 4.5 million tonnes per annum. Most of the aluminium produced here is used by the domestic aluminium rolled product manufacturers and automotive industry.  However, given the increasingly strong demand of these industries, Italy has to import aluminium scrap from the international market as well.

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Italy’s aluminium scrap imports have been holding fairly steady for the last three years with marginal year-over-year drop; this can attributed to overall slowing down of economy. In 2014, the country purchased 511986 tonnes of aluminium scrap from the global market, which dropped marginally to total 511415.27 tonnes in 2015. In 2016 again, the yearly aluminium scrap imports volume dropped by 2.04 per cent to total at 500953.3 million tonnes. In 2017, till October, Italy is estimated to import around 413641 tonnes of aluminium scrap.

Value-wise, Italy’s aluminium scrap imports have declined year-over-year. In 2014, total aluminium scrap imports by Italy was valued at US$792.4 million, which decreased by 11.8 per cent to total at US$698.3 million in 2015. In the next fiscal year, the import value of Italy’s aluminium scrap further declined to stand at US$600 million. In 2017, till October, the European country is estimated to purchase aluminium scrap worth US$438.2 million, down 13.2 per cent from the corresponding period previous year.

Despite the decrease in value of aluminium scrap imports, demand for secondary aluminium in Italy remains strong, and it is mostly driven by the demand from automotive manufacturers here which are fed by rolled aluminium product companies. Novelis which has production and recycling operations in Germany, Italy, Britain, France and Switzerland considers Europe to be a key market for its can and automotive products. According to a senior Novelis official,"Sustainability is driving increased demand for aluminium as our customers are working to reduce the weight, improve the recyclability and increase the recycled content of their products."  

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Mr. Fabrizio, at the AlCircle Roundtable, pointed out that there is an uptrend noted on the demand side for aluminium billets for extrusion of products in Europe. To cater to this demand spike, new operators are coming in- Vedanta, Hindalco and Rusal (erstwhile more focused in China) will be foraying into the markets, starting January this year, with revamped product baskets. Other historical suppliers like EGA are also waiting to explore the markets for value-added aluminium products in Europe.