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Current Developments Coronavirus Impacts Metal Industry

| Editor: Nicole Kareta

Canceled events and closed foundries - the metal industry is not spared the rising Coronavirus infections in China. Due to the cancellation of international trade fairs, the infectious disease also has a global impact. Read here about the current developments.

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The consequences of the coronavirus on the light metal industry are not yet fully foreseeable.
The consequences of the coronavirus on the light metal industry are not yet fully foreseeable.
(Source: gemeinfrei / Pixabay)

Status 04-02-2020: The current situation regarding the further spread of the Coronavirus SARS-CoV-2 is still quite unclear. According to the World Health Organization (WHO), 82,724 cases are registered in China. Since the virus causing Covid-19 became known, it has spread from its centre of origin in Wuhan, China, to other countries. The most affected countries are USA (187,302 cases), Italy (105,792 cases), Spain (94,417 cases), Germany (67,366 cases), France (51,477 cases) and Iran (47,593 cases). The Coronavirus has thus not only spread in Asia, but has also arrived in Europe and USA.

Not only the rapid spread, but also the mode of transmission via droplets and skin contact shows that the novel Coronavirus SARS-CoV-2 has an increased risk of infection and is difficult to control due to the long incubation period of up to 14 days. The effects on the economic situation, especially on foundries and the metal industry, are correspondingly uncertain. As a precautionary measure, numerous trade fairs have already been postponed, large events have been limited to a certain number of people or employees have been instructed to work from home.

Trade Fairs Postponed

As the Guangdong Province Ministry of Commerce suggests, all major events should be suspended due to the novel virus. This also affects Asiamold. The international trade fair for tool and mold making was originally planned for February 26 to 28, 2020 in Guangzhou, but has now been postponed. An alternative date is not yet known. Mr Hubert Duh, Chairman of Guangzhou Guangya Messe Frankfurt Co Ltd explained on behalf of the fairs’ co-organizers: “The wellbeing of all our stakeholders is paramount, so following the announcement by the Guangdong government to strengthen the epidemic prevention efforts by suspending all large-scale trade and economic events, we immediately began taking steps to postpone these two fairs to a later date. We are in communication with the relevant government authorities and venue owners about rescheduling the fairs later this year, but due to the evolving situation in the country, it is too early to provide any details on this.”

Also CastForge 2020, trade fair for cast and forged parts with machining, will be postponed to June 8-10, 2021 due to the spread of the corona virus. "The health of everyone has top priority and with the official legal regulation we can create planning security for exhibitors, visitors and all partners", says Thomas Walter, Head of the Industry & Technology Division and member of the Management Board at Messe Stuttgart. "Our aim is to get back on track right away and to implement a successful trade fair in 2021," emphasises Walter.

The Zinc Die Casting Conference is also postponed from June 2020 to the year 2021. The 1.5-day event is of interest to die casters, designers, specifiers, design engineers and representatives from end-use industries, and highlights the latest research, developments and innovations in zinc die casting alloys and process technologies, enhancing the functionality, design and performance of zinc die castings.

First Foundries were Closed

Foundries were also already affected by the spread of the Coronavirus. Thus, Voestalpine AG already announced in a press release at the beginning of February that the nine Chinese plants will remain closed until 9th February. According to the German news page Südtirol News, the large Austrian company cannot yet estimate how the epidemic will affect its own business. "Of course, this is also a factor of uncertainty for us as Voestalpine", quotes Südtirol News the CEO Herbert Eibensteiner. The voestalpine foundry group focuses on the production of nickel-based alloys, steel castings, nodular cast iron and non-ferrous metal castings.

Another problem affecting foundries is that the far-reaching production stop in the automotive industry is reducing the demand for cast components. This has hit particularly hard medium-sized and small foundries, which mainly produce components for the aforementioned industy.

What can Foundries Contribute During the Corona Crisis?

Due to the loss of orders, foundries must now rethink and find creative alternatives. Druckguss Service Deutschland is setting a good example: the company now also manufactures disinfectant stands from aluminium, among other materials. According to the company, the stand can be installed in entrance areas, receptions, sales and conference rooms as well as at cash desks and in toilets.

German Aluminum Industry in Danger

The German aluminum industry is also feeling the effects of the corona virus. In a press release dated March 18th, 2020, Marius Baader, Managing Director of the General Aluminum Association Gesamtverband der Aluminiumindustrie e. V., said: "The German aluminum industry is looking at current developments with great concern." According to the press release, important customer sectors in Germany and Europe have already begun to stop or significantly reduce production. The automotive business in particular is a basic industrial burden on the aluminum industry. Baader also emphasises that the free movement of goods must be maintained at all costs, as the supply chain of the aluminum industry is organised on the basis of a high degree of division of labour.

Coronavirus Affects the Overall Economy

The consulting firm McKinsey & Company lists 3 possible scenarios on its website that describe the impact of the Coronavirus on the economy: quick recovery, global slowdown as well as pandemic and recession.

According to the chinese association of the non-ferrous metal industry, the Coronavirus can cause bottlenecks in the supply of the silicon powder raw material, the german PV magazine reports.

The German news site Frankfurter Allgemeine Zeitung predicts that the Coronavirus will soon be clearly felt in German companies. The reasons for this are temporary closures of factories in China. Due to the four to six week journey length of the cargo ships coming from China, bottlenecks are to be expected. This would affect production and trade in Germany. Regarding the situation in Italy, the news site quotes Uwe Burkert, Chief Economist of the bank LBBW, as follows: "Foundries in particular are important suppliers from there, and because of the short distances involved, stocks are kept correspondingly low here. But this also means that there is a high risk of production stoppages."

It remains to be seen how these developments will continue to affect the light metal foundry industry. In order to keep you up to date, this article will be continuously revised.

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