Unlock the editor’s summary for free
Roula Khalaf, editor of the FT, selects her favorite stories in this weekly newsletter.
Brussels is preparing emergency measures to support the EU sick aluminum industry, since Donald Trump’s tariff regime diverts European scrap to the United States, leaving local recycling plants in a struggle for survival.
The levies of the president of the United States have given a double blow to the sector with an annual turnover of € 40 billion that directly uses 250,000 people and supports other work of 1 MN in Europe.
While exports to the US are subject to a 50 percent tax, reaching sales, junk shipments are exempt from any tariffs.
Tariffs have increased American aluminum domestic prices, which gives producers there to pay higher old metal prices that can be reused to make fresh products.
Scrap scarcity is leading to European recycling plants and foundations are nausea.
“The plants are already closing the capacity, and for our recyclers it is not about reducing the profit margins but the survival,” said Paul Voss, head of European aluminum of the commercial body, and added that the block only had “weeks to do it well.”
The European Commission is considering a series of measures to announce in September. Two officials said they could include a tax on all EU waste exports to the world.
“At the end of the third quarter at the latest, the commission will consider commercial measures to guarantee sufficient scrap availability,” said one, although both officials emphasized that a final decision had not yet been made.
The aluminum industry is essential for clean technologies, such as electric vehicles and wind turbines.
Scrap’s treatment is a highly competitive market in which the waste industry sells metal for the best bidder worldwide. European producers also struggle to compete with the US and Chinese foundations because the latter have much lower energy costs.
The commercial agreement of the UE-US Framework agreed in Scotland last month could not reduce tariffs on aluminum and steel. Instead, he promised to work towards the rules of the supply chain that would try to reduce the dependence of the United States in Europe while locking Chinese steel in the transatlantic market.
Brussels is pressing a quota that saves some exports of steel and aluminum from the EU of rates, which would be close to the historical export volumes.
Between 2019 and 2024, the exports of the EU of aluminum junk grew by 53 percent, while domestic use increased only 5 percent.
While Asia, directed by China, represents two thirds of EU waste exports, sales have recently fired in the United States. They almost tripled in the first three months of the year, and the prices of the US scrap. UU. They are now 20 percent higher than Europeans, according to the data provided by European aluminum.
Trump applied tariffs on finished products in March.
Customers such as drinking manufacturers can increasingly demand a higher recycled metal content, which further feeds demand. The EU industry has invested a lot in recycling ovens, but receives approximately 2 mn less tons of scrap of which it can process.
However, it is likely that any movement to limit the exports of the EU scrap scrap by exacerbe the tensions with the Washington.
The EU had threatened to prohibit exports of steel and aluminum waste to the United States until the two concluded their commercial agreement last month.
Scrap traffickers have been pressing against dramatic measures.
Olivier François, president of the Euric Commercial Agency, warned “introducing measures that could involuntarily damage the competitiveness of the European recycling industry without improving the availability of circular materials for EU manufacturers.”
A commission spokesman said: “Global overcapacity is a serious threat to the profitability and competitiveness of this sector. That is why the commission has implemented a monitoring tool in SCRAP and carefully evaluate the data collected before taking more steps.”
The commission had already put tariffs on many imports of steel and aluminum, added the spokesman.
This article has been amended to eliminate the reference to Ferroallyys in the last sentence.
