When the melting pots stop bubbling, Europe is in trouble

16 September, 2022

In today’s Exponential Investor:

  • EU risks becoming more reliant on imports
  • Base-metal smelters produce alloys for the aerospace sector
  • Will aluminium become a strategic metal?

Note from the publisher

In respect of the state funeral for Queen Elizabeth II, we’ll be pausing our communications on Monday 19 September.

Normal service will resume Tuesday.

High energy prices continue to cripple the most unsuspecting parts of our supply chain.

European smelters are reducing the amount of zinc and aluminium they are producing, which could have long-term repercussions not just for the smelting sector… but for all of us “downstream”.

The problem with taking smelters offline is that restarting them isn’t like flicking a light switch.

Once those “melting pots” have been allowed to cool, it can take months and millions of pounds to get them back to their operating temperatures.

Removing these alloys from the market makes the EU even more reliant imports, but also puts them at a strategic disadvantage.

The United States recently invoked Cold War powers to encourage domestic production of critical minerals. Given that the production of aluminium is critical to the aerospace sector, will the EU bloc do the same?

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Until next time,

Shae Russell
Co-editor, Exponential Investor