The German aluminum industry can look back on a strong 2021 despite an extremely challenging environment. Production and incoming orders in Germany have increased compared to 2020. This underlines the solution expertise and the increasing importance that aluminum is already playing in the transformation of our industry and society. However, the risks increased significantly over the course of the year and will continue to put companies under pressure in 2022.
Manufacturing in Germany: attractive material, competitive companies
German companies in the aluminum industry produced more overall in 2021 than in the previous year. The semi-finished products sector in particular grew significantly last year. At around 2 million tons, almost 10% more rolled products rolled off the production lines than in 2020. With an output of almost 610,000 tons and growth of an impressive 20%, the extrusion plants in Germany almost reached the all-time high from 2007. Raw aluminium production was stable at around one million tons. However, the drastic rise in energy prices in particular led to significant declines in production in the fourth quarter of 2021 (-16%). The companies' turnover recovered significantly after the crisis year 2020 (+23%) and almost reached the 2018 level again at EUR 21.7 billion. However, it should be noted that aluminium prices on the London Metal Exchange (LME) rose sharply over the course of the year.
Dr. Hinrich Mählmann, personally liable partner of OTTO FUCHS KG and President of Aluminium Germany, emphasized: "The German aluminium industry has once again grown in a difficult market environment. On the one hand, this underlines the attractiveness of the material in the eyes of our customers, especially on the way to a climate-neutral industry. Aluminum combines lightweight construction expertise with very high recyclability. It also shows that German plants are very efficient in a highly competitive market."
Germany as a business location in a persistent headwind
Even though the German aluminum industry fared comparatively well in the second year of the pandemic in 2021, the waters have recently become much choppier. The recent, drastic rise in electricity prices has left the energy-intensive industry increasingly with its back to the wall. The ongoing chip shortage and volatile call-off figures from customers are also putting the predominantly medium-sized companies at the edge of their existence in some cases. In addition, the recently suspended anti-dumping duties on special flat-rolled products from China are putting local producers at a considerable competitive disadvantage.
Production of the German aluminium industry (in tons) Source: Aluminium Germany, Federal Statistical Office
Dr. Mählmann comments: "We have been able to overcome the uncertainties caused by the pandemic and the market with considerable effort. We are particularly concerned about the political influence on the industry in Germany and Europe. The recent explosion in energy prices, which came as no surprise, is putting companies under massive pressure. At this point, politicians must ask themselves whether the German economy wants to make itself even more dependent on imports from partly unreliable trading partners for an increasingly relevant material such as aluminum. The uncertainty surrounding the supply of critical alloy metals has also led to great uncertainty throughout the entire supply chain. We are committed to the climate protection targets in Germany and Europe. However, we cannot decarbonize energy generation in Germany on our own. Without the rapid and determined expansion of renewables in Germany, without political support for the entire industry, decarbonization will amount to deindustrialization. That is certainly not the political goal. Moreover, the climate will not be helped if production moves to countries with significantly lower social and environmental standards. We have great confidence in the new German government to implement this ambitious project holistically and in close cooperation with industry.
Outlook 2022: Robust, with challenges
The aluminum industry is optimistic about 2022. Marius Baader, Managing Director of Aluminium Germany, comments: "The uncertainties have not disappeared, but we are learning to deal with them better. The well-filled order books of our customers in the industry make us quite positive for 2022. If supply bottlenecks and chip shortages disappear in the course of the year, the pent-up demand should materialize and bring with it a growth spurt. The German aluminum industry has a clear strategy and remains an important development partner for its customer industries in Europe and Germany. Aluminum is the enabler for "fit for 55", and we are proud of that."
