Aluminum consumption in Brazil grows at 2018

The Brazilian aluminum industry closed 2018 registering an increase in consumption and a challenging scenario in production. Last year, aluminum consumption in the country grew about 10% compared to 2017, totaling 1 million and 383,000 tonnes. Of the sectors that use metal, the largest increases were in packaging, with 14%, transports, with a little more than 12%, and the electricity segment, which reached 11%. For Milton Rego, president of the Brazilian Association of Aluminum (ABAL), this performance shows that the sector has resumed its dynamism, even in the face of the troubled reality experienced by Brazil last year. "We grew up in spite of the truckers ' strike, the economy having patinated and the political-electoral environment to the skin," he recalls. The situation requires attention in relation to the domestic production of primary aluminum, which in 2018 totaled a total of only 659,000 tonnes, a fall of more than 17% compared to 2017 (801,700 tonnes). This result is explained by two reasons. One point: The fact of the largest alumina factory in the world, Alunorte, in Barcarena, Pará, to operate with half its capacity since the beginning of 2018. Alumina is the input from which the primary aluminum is produced. The other reason is linked to the structural issues of the Brazilian economy. The main one is the impact of the price of electricity, since the process of transformation of alumina into primary aluminum is electro-intensive. "Today, the acquired electricity accounts for almost 70% of the production cost of domestic aluminum. It's a brutal weight, the bill just doesn't close, "says Milton. Between 2009 and 2015, reminds the CEO of ABAL, no less than five primary aluminum plants closed the doors in the country. ABAL follows in dealing with the economic team of the Bolsonaro government, as it did in previous administrations, in order to find a solution to the problem. The entity is a signatory, alongside 14 other class organizations, of a document proposing the modernization of the energy sector. "This is a fundamental issue for the competitiveness not only of the aluminum production chain, but for the entire Brazilian industry," explains Milton. The growth in the consumption of aluminum products in the domestic market was covered by imports, mainly of Chinese origin. "The pressure of imports, combined with the fall of our primary aluminum production, worries. In addition to decreasing added value, when we cease to produce aluminum from the Brazilian bauxite the whole chain loses competitiveness. ABAL understands that the integration of industry is fundamental to the sustainability of the sector ", warns Milton Rego.