The European foundries have left the difficut second half of the previous year behind for the time being. Although high energy prices and Russia’s aggressive behaviour continue to pose high risks for the European industry, European foundries from all material classes rate both the current business situation and the expectations for the next six months better than in the previous month. The latest easing of corona restrictions is predominantly welcomed.
After recent signs of a comprehensive slowdown, steel, iron and non-ferrous metal foundries assessed the current situation in December as significantly better than in the previous month. Expectations for the upcoming six months do not, however, take this selective assessment into account.
At the turn of the year, the CAEF presidency passed from Ignacio De la Peña to Chiara Danieli. In addition to the current challenges regarding the availability of raw materials and costs of energy, there is no lack of strategic demands she will have to push forward together with the CAEF General Secretariat and in close alignment with other European foundry associations.
While the assessment of the current business situation for non-ferrous metal foundries has already been deteriorating for months, a significant setback is now also setting in for iron foundries. Further rising costs for a variety of raw materials and energy are putting a great burden on foundries.
Continuing problems in the global supply chains and the related problems in the automotive industry in particular threaten to limit the recovery of the foundry industry and do not bode well for the first quarter of 2022. Meanwhile, the horrendous costs for raw materials and energy are causing tremendous difficulties in economic production for the energy-intensive foundry industry at the beginning of winter. This constellation is reflected in the sharpest month-to-month decline of the FISI since April 2020.
Raw Material and Energy Prices: Existential threat to the European Foundry Industry — Call for Bilateral Agreements
Prices for raw materials, energy and logistics have soared on a broad front while an increasing number of input factors is prone to run out of European stocks within the next weeks. Forwarding these unavoidable cost increases is however not taken for granted.
European foundries’ expectations for the next six months are under pressure. On the one hand, exploding raw material and energy costs have been accompanying the companies for months. On the other hand, in addition to the semiconductor crisis, the automotive industry could soon be confronted with shortages in the supply of magnesium and aluminium, just like many non-ferrous metal foundries.
The current global developments in the raw materials and energy markets represent a significant threat to Europrean foundry industry continuity. Without immediate political action, the economic recovery and future of skilled industrial workforce is at stake.
Data of unique scope and depth show the impact of the Covid-19 pandemic on European foundries. While the European production of non-ferrous metals decreased by 19.2 % overall, the production of iron, nodular iron and steel castings decreased by 19.8 % compared to 2019.
Chiara Danieli, CEO of Groupe Bouhyer, was elected as president of CAEF for the upcoming year 2022 at the CAEF Council meeting in Bilbao. She will succeed Ignacio De la Peña, who is holding the position since 2020.