Impact of EU sanctions on aluminium would be disastrous for Europe’s industry
Naike Gruppioni, member of the Foreign Affairs Committee of the Italian Parliament, recently stated that, while in Brussels a new set of sanctions against Russia is being considered, “sanctioning aluminium from Russia would be politically and economically counterproductive, as the EU market does not follow the same supply patterns as those of the UK and the US”, which instead recently imposed restrictions banning Russian aluminium from using the London Metals Exchange (LME) and the Chicago Mercantile Exchange (CME) as markets of last resort”.
In fact, as the MP said, the aluminium “proceeds through a high-value-added European supply chain that supports jobs and investments across Europe. Significant downstream European operations like foundries and refineries are spread across the continent – often in manufacturing regions that cannot afford to lose those high-skilled jobs”.
As we have been advocating for a long time, “any sanction on aluminium would undermine – and in some cases, completely kill – this high-value-added European supply chain. Restrictions on such a large source of supply would lead to price increases and inflation at every stage, from raw materials to finished products, including clean energy infrastructure and consumer goods. The return of inflation caused by political decisions is the last thing the European industry and consumer need. When that European supply chain is shut down after the imposition of sanctions, what will happen to the EU’s aluminium demand? The answer is that the EU will become even more dependent on the world’s number one aluminium producer: China”.
EU Member States should not sanction aluminium because “the benefits would be purely performative, and the disadvantages would be real and have enormous repercussions not only on competitiveness, but also on security and strategic dependence. We would put the very survival of the European industrial fabric at real risk – both in processing countries like Sweden and Ireland, and in industrial end-user countries like France and Italy”.
[Source: Euractiv]
Read the full article by Euractiv: https://www.euractiv.com/section/economy-jobs/opinion/impact-of-eu-sanctions-on-aluminum-would-be-disastrous-for-europes-industry/