Aluminum: The 'breaking point' threatening European boating
Record costs at the LME and customs duties weigh on the supply chain: Face raises alarm for a general manufacturing sector with 1,8 billion in extra costs
The European recreational boating manufacturing industry is also monitoring the dynamics of the raw materials market with concern. The alarm has been raised by FACE (Federation of Aluminium Consumers in Europe), which, through its Secretary General Mario Conserva, warns that the manufacturing sector is nearing breaking point.
The price of aluminum on the London Metal Exchange has reached €3.600 per ton and could reach €4.000. According to an analysis conducted by Face with Luiss University, this spike, combined with fixed costs, generates a premium for European companies of €1,8 billion per year. This represents a net doubling of the €1 billion estimated when the market was stable (between €2.300 and €2.500).
According to Conserva, in addition to global fluctuations, the greatest burden comes from the EU's policy on customs duties on raw aluminum: a tax that, by adding between 80 and 100 euros per ton, has made European manufacturing structurally vulnerable over the past twenty years. For Face, these duties act as a "hidden subsidy": downstream industries (including large and small shipyards and their suppliers) pay very high prices to protect a now minimal domestic primary production.
The nautical sector also finds itself in a paradoxical situation. Europe must import over 85% of the primary aluminum it uses, and while we import new metal at a high price, aluminum scrap—essential for recycling—leaves the continent to be sold elsewhere. This situation makes our companies much more fragile in the face of external shocks, such as the Covid crisis, the war in Ukraine, and the current geopolitical tensions.
Aluminum is used in every sector, from nautical construction for hulls and superstructures—but also in automobiles, packaging, construction, and electronics—and the industry can no longer sustain this burden. FACE's conclusion is embodied in the proposal to the EU Commission to immediately eliminate tariffs on unwrought aluminum. According to the Federation, this is the only way to restore competitiveness to manufacturing companies and save Europe's productive capacity.
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