Unable to withstand the energy crisis, European aluminum producers flocked to Turkey.
The pressure of the energy crisis on aluminum is increasing. Production in Europe fell to its lowest level since the 1970s. The fact that the production cost was much higher than the price of the product hit the manufacturer in Europe. This crisis, which took Europe captive, was both a challenge and an opportunity for the aluminum producer in Turkey. Production started to shrink in factories that increased billet casting capacity last year. However, the fact that the European manufacturers who were stuck in a corner turned to Turkey for contract manufacturing opened a new door of opportunity.
Emre Köksal, CEO of Alumet Aluminum, which is preparing to cooperate with Europe, said that many European manufacturers, who had to cut down or stop their production, are looking beyond the border to protect their brand value and market share. Evaluating the effects of the crisis on Turkey, Köksal stated that European companies turned to contract manufacturing in order to survive and said, "Turkey is one of the addresses preferred by these companies." Köksal gave the following information:
Demand for 'luxury' metal slumps in recession
“Due to the supply problems experienced last year, there was an increase in billet casting capacity all over the world, including Turkey, in order to meet the demand. However, this year, inflationary pressures, shrinking demand due to recession concerns and the cost shock created by the energy crisis triggered by the Russia-Ukraine war caught the European producer by surprise. Europe could not produce and lost the market. Aluminum is a metal that can be described as 'luxury' because it is used in higher segment products.
Therefore, consumption is adversely affected in times of crisis. The decline in consumption due to the concerns of economic recession hit the producer. They are looking for the solution in contract manufacturing. As Alumet Aluminum, we are also negotiating with European companies. We are working to develop cooperation between companies that have market in Europe and companies like us that have production power in Turkey.”
Turkey stands out, China cannot take back the market
Expressing that the freight problem in the Far East, antidumping practices up to 40 percent and the restrictions of COVID-19 in China brought Turkey to the fore, Köksal pointed out that despite China's efforts, it could not regain its market share because it was stuck with freight and high tariffs.
THEY ARE FIGHTING TO SURVIVE
Aluminum production in Europe fell to its lowest level since the 1970s. Because now the cost of production has exceeded the price of the product. The cost of electricity needed to produce a ton of aluminum in Germany last week was $4200. It had exceeded $10,000 the previous month. The London Metal Exchange futures price is $2,300 per ton. At the end of this quarter, the price is estimated to be around $2,200. Over the 12-month period, prices are more likely to stay closer to $2,000. This means that the restrictions are likely to accelerate over the winter.
They were in danger of extinction
Experts warn that if the problem grows in Europe, some companies may disappear. Norsk Hydro ASA will stop production at a large facility in Slovakia this month. German aluminum giant Speira GmbH has announced that it will reduce its aluminum production in Germany by 50 percent due to rising energy prices. “Once gone, aluminum smelters are not going to come back,” says Mark Hansen, CEO of metal trading house Concord Resources Ltd. Similarly, Uday Patel, Wood Mackenzie's senior research manager, warns, "Once things get better, there are smelters that may never start their operations again." Wood Mackenzie estimates that Europe is losing about 1 million tonnes of annual aluminum production capacity, and Patel says it's about a percent of that. He says he expects 25 to be permanently restricted, with another 500,000 tonnes "highly vulnerable" to closure, according to Wood Mackenzie's estimates.
www.dunya.com
Foreign direct investment to Turkey in July reached 1.7 billion Euros.
The pressure of the energy crisis on aluminum is increasing. Production in Europe fell to its lowest level since the 1970s. The fact that the production cost was much higher than the price of the product hit the manufacturer in Europe. This crisis, which took Europe captive, was both a challenge and an opportunity for the aluminum producer in Turkey. Production started to shrink in factories that increased billet casting capacity last year. However, the fact that the European manufacturers who were stuck in a corner turned to Turkey for contract manufacturing opened a new door of opportunity.
Emre Köksal, CEO of Alumet Aluminum, which is preparing to cooperate with Europe, said that many European manufacturers, who had to cut down or stop their production, are looking beyond the border to protect their brand value and market share. Evaluating the effects of the crisis on Turkey, Köksal stated that European companies turned to contract manufacturing in order to survive and said, "Turkey is one of the addresses preferred by these companies." Köksal gave the following information:
Demand for 'luxury' metal slumps in recession
“Due to the supply problems experienced last year, there was an increase in billet casting capacity all over the world, including Turkey, in order to meet the demand. However, this year, inflationary pressures, shrinking demand due to recession concerns and the cost shock created by the energy crisis triggered by the Russia-Ukraine war caught the European producer by surprise. Europe could not produce and lost the market. Aluminum is a metal that can be described as 'luxury' because it is used in higher segment products.
Therefore, consumption is adversely affected in times of crisis. The decline in consumption due to the concerns of economic recession hit the producer. They are looking for the solution in contract manufacturing. As Alumet Aluminum, we are also negotiating with European companies. We are working to develop cooperation between companies that have market in Europe and companies like us that have production power in Turkey.”
Turkey stands out, China cannot take back the market
Expressing that the freight problem in the Far East, antidumping practices up to 40 percent and the restrictions of COVID-19 in China brought Turkey to the fore, Köksal pointed out that despite China's efforts, it could not regain its market share because it was stuck with freight and high tariffs.
THEY ARE FIGHTING TO SURVIVE
Aluminum production in Europe fell to its lowest level since the 1970s. Because now the cost of production has exceeded the price of the product. The cost of electricity needed to produce a ton of aluminum in Germany last week was $4200. It had exceeded $10,000 the previous month. The London Metal Exchange futures price is $2,300 per ton. At the end of this quarter, the price is estimated to be around $2,200. Over the 12-month period, prices are more likely to stay closer to $2,000. This means that the restrictions are likely to accelerate over the winter.
They were in danger of extinction
Experts warn that if the problem grows in Europe, some companies may disappear. Norsk Hydro ASA will stop production at a large facility in Slovakia this month. German aluminum giant Speira GmbH has announced that it will reduce its aluminum production in Germany by 50 percent due to rising energy prices. “Once gone, aluminum smelters are not going to come back,” says Mark Hansen, CEO of metal trading house Concord Resources Ltd. Similarly, Uday Patel, Wood Mackenzie's senior research manager, warns, "Once things get better, there are smelters that may never start their operations again." Wood Mackenzie estimates that Europe is losing about 1 million tonnes of annual aluminum production capacity, and Patel says it's about a percent of that. He says he expects 25 to be permanently restricted, with another 500,000 tonnes "highly vulnerable" to closure, according to Wood Mackenzie's estimates.
Köşeye sıkışan Avrupalı alüminyum üreticileri Türkiye’ye yöneldi
Alüminyum üretimi neredeyse 50 yılın en düşük seviyesine inen Avrupa’daki fabrikalar fason üretim için Türkiye’ye yöneldi.
www.dunya.com
Foreign direct investment to Turkey in July reached 1.7 billion Euros.
