The German aluminum industry had to cope with a considerable economic slump in the first half of the year. The production of raw metal fell by more than 14%, while further processing and the production of semi-finished products both fell by more than 5%.
"The coronavirus crisis has torn deep holes in the balance sheet for the first half of the year. Our ad hoc member survey, which we conducted at the end of the second quarter of 2020, shows the immense impact and force of the coronavirus pandemic. With a share of 92%, the lack of orders is the most significant obstacle to production. Of course, this slump is also reflected in our call-off and production figures," explained GDA Managing Director Marius Baader. Many customer sectors, particularly the aviation and automotive industries, have seen a sharp drop in sales. Many member companies had to quickly reduce their production or temporarily shut it down completely. Marius Baader continues: "The German government put together aid packages for companies very quickly. The speed of response was a great help to companies at the beginning of the crisis."
Negative production trend in the 1st half of 2020
In the aluminum industry, the raw aluminum sector has been hit hardest by the economic slump. Producers had to cope with a decline of over 14% in the first half of the year. Recycling companies, whose products are primarily used in aluminum casting and are therefore 90% dependent on the development of the automotive industry, suffered the most. With the OEM plant closures in the second quarter, production has also largely come to a standstill here. Overall, the decline in the first half of the year amounted to just under 30 percent.
The manufacturers of semi-finished aluminum products had to cut their production by five percent. The product areas that dominate in terms of volume - rolled products and extruded products - have been affected differently by the economic slump. Due to the stabilizing effects of the packaging market, production in the rolling mills only fell by 2.6%, while manufacturers of profiles, rods and tubes had to reduce their production by over 12%. Here, too, the reason is the strong dependence on automotive plants.
Production data for the German aluminium industry (in tons)
|
Jan-Jun 2019 |
Jan-Jun 2020 |
Change compared to the same period last year |
||
|
Primary aluminum |
251.400 |
266.200 |
5,9 % |
|
|
Recycled aluminum |
357.900 |
255.700 |
- 28,6 % |
|
|
Total aluminum |
609.300 |
521.900 |
-14,3 % |
|
|
Rolled products |
979.800 |
954.400 |
- 2,6 % |
|
|
Extruded products |
282.300 |
247.100 |
- 12,5 % |
|
|
Conductive material + wires |
13.200 |
10.200 |
- 22,7 % |
|
|
Total semi-finished aluminum products |
1.275.300 |
1.211.700 |
- 5,0 % |
|
|
Foils and thin tapes |
145.700 |
137.600 |
- 5,6 % |
|
|
Tubes / aerosol and other cans |
21.800 |
21.200 |
- 2,8 % |
|
|
Metal powder |
17.100 |
16.300 |
- 4,7 % |
|
|
Total aluminum processing |
184.600 |
175.100 |
- 5,1 % |
|
Sources: GDA and Federal Statistical Office; data partly provisional.
The development of aluminum processors was also unable to escape the negative trend. Although the packaging markets have come through the crisis much better so far, capacities in Germany have been reduced in recent years. As a result, German production development is lagging behind the actual market development.
Outlook: slight signs of recovery / tense trade policy situation
The outlook for the second half of the year is somewhat more positive: the automotive industry is showing the first signs of a slight recovery. The construction industry, one of the most important customer sectors, has recorded significantly smaller declines than expected. The members of the GDA expect a slight recovery in the second half of the year, although the production volume of 2019 remains out of reach for the foreseeable future.
"We are very concerned about the increasing trade conflict between Europe and China. China has built up an enormous amount of overcapacity in recent years. Significant parts of this are pushing into the European Union. This is why the EU initiated an anti-dumping investigation into aluminum extrusions originating in China back in February 2020. This has now (August 2020) been joined by a new investigation into certain rolled aluminum products, which account for the majority of aluminum imports. China must also abide by the global rules of free and fair trade. We therefore welcome the review of the Chinese aluminum industry's behavior," explains Andreas Postler, Head of Economics and Trade Policy.
The medium-term outlook for the aluminum industry remains very good: "The demand for aluminum will continue to increase globally and demand in Germany also remains high. The material offers innovative solutions for the issues of our time. And Germany is a highly competitive and efficient location. The high innovative potential and technical expertise of its employees are largely responsible for this," adds GDA Managing Director Marius Baader.
