Yunnan, swing producer of aluminum
Worldwide aluminum demand is set to increase by 40% by 2030, driven by increased use in transportation, electricity, packaging, and construction. But global production is struggling to keep up.
While numbers from the Industrial Aluminum Institute show global output of the primary metal grew by 2% year-on-year in the first three months of 2023, China—which accounts for nearly 60% of total production—saw its output growth rate slow sharply to just 0.9% last month.
The global market for the industrial metal now hinges on China’s southwestern province of Yunnan, which accounts for 12% of the country’s aluminum capacity. A historic drought there is crimping hydro power, which producers have increasingly begun to lean on as Beijing works to cut emissions. That’s making Yunnan a swing producer. And it further amplifies China’s influence over global aluminum production patterns.
Then there’s Russia. With domestic production looking shaky, Chinese imports of refined aluminum from Russia tripled year-on-year in the first quarter. Moscow is no doubt grateful for an eager customer as the West shuns Russian commodities.
The upshot: The US has an opportunity to take a leading role in producing low-carbon aluminum. And, conveniently, Joe Quinn of the SAFE Foundation wrote last month on how the US can address its aluminum production challenge.
Chinese monthly aluminum production, year-on-year growth
Source: Industrial Aluminum Institute
Turkey deepens its Russian energy dependence
A final nuclear plant shuts in Germany. An inaugural one opens in Turkey. Undergirding both developments is Russia’s continuing influence in global energy markets, even as the West tries to limit Moscow’s revenue from fuel sales.
Earlier this month, Germany closed the last of its nuclear power plants—having delayed the closure from October following Russia’s throttling of pipeline gas supplies. Meanwhile, Turkey this week opened its first nuclear plant, built and owned by Russia’s state-owned Rosatom. President Vladimir Putin hailed the project’s “mutual economic benefits” for the two countries.
But mutual benefit or not, it’s clear which party has more leverage: As Moscow pursues its strategy of projecting influence through Rosatom projects worldwide, Turkey—already dependent on Russian gas—will deepen its energy reliance on Russia. Under the terms of the Turkey-Rosatom agreement, Russia could control Turkey’s nuclear energy for the next 80 years.
There’s nuclear will, but where’s the nuclear way?
Over in the US, the public is warming to nuclear. A Gallup poll shows that American’s support for nuclear energy is the highest in a decade, at 55%. But while nuclear is seen as an alternative to fossil fuels that can smooth the energy transition, critical dependencies lurk.
For one, the US is almost entirely reliant on imports for uranium. It also has limited enrichment and conversion capacity. A bipartisan bill aimed at strengthening domestic nuclear fuel production was introduced in the Senate in February. But for the most part, the US response to its uranium import dependence has been what the American Nuclear Society calls “paralysis.”
Europe’s natural gas buyer’s club
Europe this week launched a joint natural gas buying mechanism. Dubbed AggregateEU, about 80 companies have already signed on to the platform, which will begin matching buyers and sellers with tenders beginning early next month. The idea is that joint purchasing could help buyers secure better terms on global gas markets, and especially help smaller, energy-intensive companies from landlocked countries secure fuel.
The big question: Will the buyer’s club meaningfully improve Europe’s energy security? For now, the EU is only aiming to jointly buy 13.5 billion cubic meters of gas—less than four percent of the bloc’s total demand.