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Economic Development

Aluminum Suffers Slight Dent

| Editor: Alexander Stark

The German aluminum industry is posting subdued expectations during the first half of 2019. The trade conflict between the USA and China gives cause for concern, but the industry is on a solid growth path in the medium to long term.

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The aluminum industry expects a slight economic dip in 2019.
The aluminum industry expects a slight economic dip in 2019.
(Source: (www.makis-photography.com) GDA e.V)

Expectations for 2019 are subdued. “The economic slowdown in key industries is also making itself felt in our call-off figures,” says Marius Baader, Managing Director of the German Aluminium Industry Association (GDA). “Therefore, we anticipate a decline in production for our industry.” In the first half of 2019, the development of the aluminum market in Germany varied. Aluminum manufacturers had to reduce their production by 5.6 % and processors by 5.4 %, while producers of semi-finished products were able to increase their production by 1.9 %.

From January to June 2019, around 629,200 tons of raw aluminum were produced in Germany. The production of raw aluminum during this period was divided into 251,400 tons of primary aluminum and 377,800 tons of recycled aluminum. Production of recycled aluminum fell by 5.2 % year-on-year, while smelter production fell by 6.3 %.

The production of semi-finished aluminum products rose by 1.9 % to 1,275,400 tons in the period from January to June 2019. This sector manufactured rolled products, extruded products, conductive materials and wires for, among others, the automotive industry, the construction industry, mechanical engineering and the packaging industry. In terms of volume, the largest part of the German production of semi-finished aluminum products is accounted for by the rolling mills. The production of rolled aluminum products totaled 979,900 tons. This represents an increase of 4.4 % compared with the same period of the previous year. Producers of extruded products reported a negative production trend of 282,400 tons during the first half of 2019. The two main markets for extruded products are the construction and transport sectors. The remaining part of semi-finished products (conductive materials and wires) rose by 3.1 % to 13,100 tons.

From January to June 2019, some 185,100 tons of aluminum were processed in Germany. The production volume therefore decreased by 5.4 % compared to the same period of the previous year. While the production of metal powder and the production of films and thin strips fell by 3.7 to 5.1 %, the production of tubes, aerosol cans and other cans in Germany fell even more sharply by 9 %.

Aluminum: Current State and Outlook

Although the economic outlook for the aluminum industry is currently bleak in many product areas, the industry is still on a solid growth path in the medium to long term: “Demand for aluminum will continue to grow globally and demand in Germany is also continuing to be on a high level,” says Christian Wellner, Managing Director of GDA. “The past has shown that the German aluminum industry was able to prevail despite increasingly fierce competition and a slow-down in demand. This positive performance achieved by German companies is largely due to their high innovation potential and their strong competitive position.” However, Andreas Postler, Head of Economic Affairs and Trade Policy, expresses his concern regarding the trade conflict between the USA and China. “On the one hand, because it diverts considerable quantities of aluminum products to the European market. On the other hand, the fear of large-scale protectionism considerably reduces the investment activity in many sectors.

This article was first published by blechnet.

Original by Simone Käfer / Translation by Alexander Stark

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