OYou can’t do without aluminum, especially not when converting to a climate-friendly economy. Electric cars, renewable energies, housing construction, machines, electronics or packaging that can be recycled almost indefinitely: the light metal is needed everywhere. At “Aluminum 2022”, which brings together more than 700 exhibitors from 50 countries for three days at the Düsseldorf exhibition center, many companies are primarily concerned with the question of where the material will be manufactured in the future. “The high energy prices are tearing the rug out from under the feet of energy-intensive production in Germany,” said Rob van Gils, the newly elected new President of the Aluminum Germany industry association.
The production of primary aluminum consumes a lot of electricity. The sector with around 60,000 employees in Germany is one of the most energy-intensive industries of all. Trimet’s main factory in Essen, for example, needs as much electricity as the entire metropolis in the Ruhr area with its 580,000 inhabitants. Because of the sharp rise in electricity prices, Germany’s largest aluminum manufacturer cut back its production significantly almost a year ago. The plants in Essen, Hamburg and Voerde are currently only running at half their capacity. The costs have risen to such an extent “that it is no longer possible to cover the costs, let alone make a profit,” says Philipp Schlueter, the CEO of the family company.
Favorable supply contracts are expiring
Trimet is not an isolated case. German production of raw aluminum fell by more than a fifth to almost 450,000 tons in the first half of the year, with the decline accelerating in the second quarter. And the situation is getting worse because old supply contracts are expiring, in which the companies had secured comparatively cheap electricity prices. According to van Gils, this will affect almost 40 percent of German aluminum companies by the end of the year, and for another 30 percent it will be in mid-2023 at the latest. “For some, the tree is already burning,” he said.
The North Rhine-Westphalian Economics Minister Mona Neubaur (Greens) described the aluminum industry as a “key industry” for Germany and NRW and as an “enabler” on the way to a climate-neutral society. It is necessary to limit energy prices as quickly as possible, and in the medium term it is about accelerating the expansion of renewable energies. “The next five years will be crucial for the transformation of industry to succeed,” says Neubaur.
From the point of view of the industry, time is of the essence: “Once production has been relocated, it will not come back,” said von Gils. De-industrialization begins in basic industries. More than half of the raw aluminum is already produced in China – but with three times the carbon dioxide emissions. “We are going into the next dependency on partly unreliable trading partners,” warned the association president.