Aluminium industry expecting ‘economic dip’ in 2020

The aluminium industry is expecting an 'economic dip' in 2020, according to the Gesamtverband der Aluminiumindustrie (GDA).

According to the GDA, the German aluminium industry saw restrictions in production in all areas in the first half of 2020, though it is expecting a slight recovery in the second half of the year.

Production of raw metal fell by more than 14%, with further processing and the production of semi-finished products each falling by more than 5%.

GDA’s managing director Marius Baader, commented (in a statement translated from German): “The COVID-19 crisis tore deep holes in the balance sheet for the first half of the year. Our member survey, which we carried out at the end of Q2 2020, shows the immense effects and force of the coronavirus pandemic.

“With a share of 92%, the lack of orders is the most significant production hindrance. This slump is, of course, also noticeable in our call-off and production figures.”

The organisation said many customer industries, especially the aviation and automotive sectors, posted a ‘sharp drop’ in sales. Many of its member companies also had to reduce their production quickly, or even halt production temporarily.

“The federal government quickly put together aid packages for companies,” added Baader. “The speed of reaction helped the company a lot at the beginning of the crisis.”

The outlook for the second half of the year is somewhat more positive, according to the GDA. While GDA members anticipate a slightly recovery in the second half of 2020, the production volume of 2019 “will remain out of reach”.

“We are very concerned about the growing trade conflict between Europe and China,” said Andreas Postler, head of economics and trade policy.

“China has built up an enormous amount of overcapacity in recent years. Significant parts of this are entering the EU. That is why the EU launched an anti-dumping investigation into aluminium extrusion products originating in China in February.

“Additionally, there is a new study of certain aluminium rolled products, which make up the largest part of aluminium imports.

“China, too, must abide by the global rules of free and fair trade. We therefore welcome the review of the behaviour of the Chinese aluminium industry.”

Baader concluded: “The demand for aluminium will continue to grow globally and demand in Germany is consistently high. The material offers innovative solutions for the questions of the time. Germany, as a location, is highly competitive and powerful – this is largely due to the high innovation potential and technical competence of the employees.”

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