Energy Crisis – Impact & Restructuring of Aluminum Extrusion

The Bottom Line: Opportunity Exists – But Only for Those Who Act Now

Europe’s second energy crisis in five years is creating a structural supply gap in aluminium. For Chinese extruders, this opens a real export window – but anti-dumping duties and CBAM carbon costs stand in the way.

The key question is not whether the crisis will affect the industry. Instead, companies must ask: How profoundly will it reshape the entire value chain?

АЛУММИРА, an aluminium alloy supplier with deep roots in the European market, has observed a clear shift. More European customers are now asking about non‑European alternatives. They want to know whether longer delivery lead‑times can secure more stable pricing.

This is not a short‑term trend. It is a supply chain restructuring.

Why Energy Costs Are the Achilles’ Heel of Aluminium Smelting

The Numbers Tell the Story

Producing one tonne of primary aluminium consumes 13,500–16,000 kWh of electricity. In Europe, industrial electricity prices now range from €80 to €120/MWh. That is two to four times the levels in China, the United States, or the Middle East.

The transmission channel is brutal. The Strait of Hormuz disruption reduces LNG arrivals, driving up gas‑fired power costs. In Germany, Italy, and the Netherlands, wholesale electricity follows natural gas almost one‑for‑one.

For an aluminium smelter, every €10/MWh increase in power cost adds roughly €135–160 to the cost per tonne of metal.

Europe’s Production Has Collapsed

Since 2022, Europe has shut down about 50% of its primary smelting capacity. Today, the EU produces only around 950,000 tonnes of primary aluminium annually. However, it consumes 13.5 million tonnes – a structural deficit of 93% .

The Slovalco plant in Slovakia is a case in point.

In 2022, it halted all production when power prices skyrocketed. In July 2026, it announced a partial restart of 75,000 tonnes. However, its total capacity is 175,000–200,000 tonnes.

Even if fully restarted, it would cover merely 2–3% of the EU’s annual aluminium deficit.

European Aluminium Extruders Face a Double Squeeze

Squeeze #1: Direct Energy Costs

Extruders transform primary or recycled aluminium into profiles for construction, automotive, and machinery. The direct energy cost of extrusion accounts for 8–12% of production costs.

More importantly, extruders source most of their billet from domestic smelters or imports. When domestic smelters shut down, billet premiums rise. European P1020 premiums have hovered around **$487/tonne** – down from May’s peak of $621, but still elevated compared to historical averages.

АЛУММИРА has observed that many small‑ and medium‑sized extruders – which previously sourced only European billet – are now actively reaching out to Asian suppliers of aluminium alloy ingots and billets.

One ALUMMIRA business director noted: “European customers are now less concerned about ‘where to buy’ than about ‘whether supply can be guaranteed continuously’. The uncertainty of energy prices has made the supply commitments of European smelters unreliable.”

Squeeze #2: Carbon Regulations (CBAM)

The EU’s Carbon Border Adjustment Mechanism (CBAM) entered full application in January 2026. It requires importers to buy carbon certificates at roughly €75–90/tonne of CO₂ .

For aluminium, CBAM adds an estimated €80–120 per tonne of carbon cost, depending on the production route.

Smaller extruders – lacking dedicated sustainability teams – are struggling to absorb both the administrative overhead and the higher cost of low‑carbon primary metal.

In Q1 2026, German recycled aluminium production fell by 3% year‑on‑year – partly due to high scrap prices and partly due to energy‑related curtailments.

Reshaping Supply and Demand: What This Means for Chinese Exports

The Supply Gap Is Real

The EU’s self‑sufficiency rate has dropped below 7% . The affected smelting capacity in 2026 is estimated at 3.45 million tonnes across Western and Central Europe.

This gap must be filled by imports – primarily from the Middle East, Russia, and Asia.

Demand Is Mixed – But Key Sectors Are Growing

Automotive lightweighting и solar photovoltaic frames continue to drive robust demand for extruded profiles.

В CEN FLEXCRASH project – launched in August – is pushing for more aluminium in car body structures. This will further boost high‑strength extrusion grades.

Однако, construction – another major pillar – remains sluggish due to high interest rates and the lingering effects of the economic slowdown.

The Two Barriers for Chinese Exporters

Barrier #1: Anti‑Dumping Sunset Review

On March 27, 2026, the EU initiated a sunset review of anti‑dumping duties on Chinese aluminium extrusions. Current duties range from 21.2% to 32.1% .

The review decision – expected by March 2027 – will determine whether these tariffs are extended, lifted, or raised.

Barrier #2: CBAM Carbon Costs

CBAM adds an estimated €80–120 per tonne of carbon cost for Chinese extrusions.

Together, these measures mean that even with a supply gap, Chinese products may not be cost‑competitive unless they adopt low‑carbon smelting or shift production to third countries.

The Opportunity, According to ALUMMIRA

АЛУММИРА believes the current market environment actually creates a structural opportunity for Chinese aluminium alloy suppliers.

“European customers are re‑evaluating their supplier lists,” the team commented. “In the past they might have considered only European or a few traditional sources; now they are willing to sit down and talk with more Asian suppliers. This is not short‑term emergency buying – it is a supply chain restructuring.”

Three Structural Shifts Reshaping the Industry

Shift #1: Global Supply Chains Are Re‑Routing

European buyers are diversifying away from Russian metal – still available but politically risky. They are increasing term contracts with Middle Eastern smelters that use cheap associated gas.

Indonesian and Indian capacity is also being qualified for European automotive and aerospace specifications.

This geographical recomposition reduces Europe’s dependence on any single source – but it also raises logistics costs and lead times.

Shift #2: The Circular Economy Is Accelerating

The EU’s 15% export tax on aluminium scrap – effective September 9, 2026 – is expected to keep about 2 million tonnes of scrap within the bloc each year.

This will boost European recyclers, who use only 5% of the energy of primary smelting. It will make recycled‑based extrusion billet more price‑competitive.

However, for Chinese recyclers, this tax means a loss of a major scrap source – about 30% of China’s imported aluminium scrap historically came from Europe. They must now look to Southeast Asia or domestic “urban mining”.

Shift #3: Energy‑Related Competitiveness Remains Decisive

European smelters will only survive if they secure long‑term power purchase agreements with renewable generators or receive state aid – both of which are limited.

Chinese aluminium producers – by contrast – benefit from stable coal‑based power (albeit carbon‑intensive) and rapidly expanding solar and hydro capacity in western provinces.

This cost advantage is widening, not narrowing.

Strategic Takeaways for Chinese Extrusion Companies

1. The short‑term window is real. Europe needs metal. Tariffs may be reduced if the sunset review finds no injury to EU producers.

2. The long‑term game is about decarbonisation. Invest in green aluminium – using hydropower or carbon capture. Alternatively, set up recycling facilities in Europe itself to bypass both anti‑dumping and CBAM.

3. Alternative markets are growing faster. Southeast Asia, the Middle East, and Africa may offer better risk‑reward profiles than the increasingly regulated European market.

Conclusion: A Window of Opportunity Behind High Walls

Europe’s second energy crisis in five years is not a temporary spike – it is a structural reset .

The crisis is widening the cost gap between European and Chinese aluminium production. For Chinese extruders, this creates a genuine export opportunity – but only if they can navigate the twin hurdles of anti‑dumping duties and carbon tariffs.

АЛУММИРА offers a forward‑looking perspective: “Companies that start now to build European customer relationships and understand EU carbon compliance requirements will gain a first‑mover advantage over the next three to five years. If you wait until the market is fully clear before acting, the window may have already closed.”

The smart players are already diversifying their supply chains, investing in low‑carbon technologies, and even considering local production in Europe.

The energy crisis has not killed the aluminium industry. It has merely redrawn the map. Those who read the map correctly will thrive. Those who ignore it will be left behind.

About ALUMMIRA

ALUMMIRA (alummira.com) is an aluminium alloy supplier specialising in aluminium profiles and products. The company is committed to providing high‑quality aluminium material solutions to customers worldwide.

If you are interested in European aluminium market trends, supply chain strategies, or aluminium procurement needs, please visit the ALUMMIRA official website or contact the business team directly through the contact information provided there.

Parts of the industry insights in this article are derived from field feedback from ALUMMIRA’s European market team.