German aluminum industry faces production shortages and import pressures

11 Jun 2024 --- The German aluminum industry recorded production declines in almost all sub-sectors in the first quarter of 2024. Rob van Gils, president of Aluminium Deutschland, explains that high energy costs and the overall tense economic situation in Germany continue to negatively impact manufacturers.

“Demand from important customer industries — especially from the construction industry — remains at a low level. Added to this are the weak registration figures for electric cars as a result of the federal government’s overnight cancellation of funding.”

Even recycled aluminum production fell significantly — despite its importance for the decarbonization of Europe and the associated market potential, finds the German association. From January to March, 685,000 metric tons of recycled aluminum were produced in Germany (-7%).

This contrasts forecasts made at the beginning of the year, when aluminum demand was expected to rise by 40% by 2030. At the time, European packagers called on the EU to ensure essential policy changes were enacted to protect the sector’s financial and environmental sustainability, as cheaper, more energy-intensive produce was filling the market gap.

Kelly Roegies, senior communications manager at European Aluminium, told Packaging Insights that the Packaging and Packaging Waste Regulation is an important opportunity for European leaders to implement needed revisions.

Rcycled aluminum production fell significantly in Q1 2024, finds Aluminium Deutschland. A fair open market?
For the producers of semi-finished aluminum products, the volume fell by double digits in some cases in the first three months of this year. A total of just over 571,000 metric tons were produced, registering a decrease of 6%, according to Aluminium Deutschland.

Of these, manufacturers of rolled products recorded a comparatively moderate decline of -5% to around 448,000 metric tons. In contrast, the production of extruded products fell by 13% to just under 124,000 metric tons, a much greater drop.

Especially in the aluminum extrusion sector, German manufacturers are facing increasing competitive pressure from third countries, especially Turkey. Ten years ago, their market share in Germany was just under half — in the first quarter of 2024, the market share of German manufacturers reached a good third.

The largest importers to Germany today are manufacturers from Turkey. Their market share has risen to around 10% in recent years. Van Gils says: “We do not shy away from competition and are in favor of free trade. German industry depends on open markets like hardly any other. But competition must take place on fair terms.”

“The flood of imports from Turkey at least raises questions about a level playing field. It is not without reason that the US has initiated an anti-dumping procedure here. State interventions can affect energy supplies, financing conditions or tax breaks.”

Van Gils furthermore stresses that Turkish extruders benefit from discounted access to Russian primary metal “while we are making every effort to become independent of it — that alone is morally highly questionable.”

By Natalie Schwertheim

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