Cu2 Consulting expects European demand for copper and copper alloy rolled products to grow by +8.4% in 2021, which will more than compensate for the decline suffered in 2020
Last year, affected by the pandemic, demand for copper and copper alloy rolled products in Europe hit its lowest level in 35-38 years, even falling below the low recorded in 2009.
More specifically, the y-o-y decline suffered in 2020 was not particularly strong (-3.3% y-o-y), thanks to a good start and a good final part of the year. However, given the sharp drop recorded in 2019 (-12.7%), even this moderate contraction was sufficient to bring European demand back to the levels of the early ‘80s.
Trends were not homogeneous by alloy group or country. In the first case, copper rolled products (which indeed may include a few quantities of low-alloyed copper) were the only sub-segment whose demand did not contract in 2020. In contrast, demand for roofing rolled, brass rolled, bronze strips, and other copper alloys declined.
From a geographic perspective, Germany – by far the largest market for rolled products in Europe – performed relatively well in 2020, and even recorded a y-o-y increase in demand for copper rolled. Other markets also did well and recorded growth in 2020, including the Czech Republic and Slovakia, Austria, Belgium, Denmark and Greece. In contrast, all other largest and medium European markets contracted their size in 2020, with Spain being the worst performing country.
The outlook for 2021 is bright. Cu2 Consulting expects demand for rolled products in Europe to increase by +8.4% y-o-y, which will more than offset the drop recorded in 2020, exceeding it by 2.5 times. Demand will continue to grow in 2022, although at a softer pace (+3.9%).
In detail, we estimate that demand has grown by +11% y-o-y during the first half of 2021 and that it will keep growing at an average rate of +5% over the following 12 months, until June 2022. Demand will also continue increasing in the latter part of next year, although progressively softer.
The development expected in 2021-2022 will allow Europe to recover 15% more than the increase in volumes achieved in 2017-2018. However, given the low starting point of 2020 (the lowest of this century), at the end of 2022, demand would not yet reach the good level achieved in 2018.
However, several headwinds could weigh on the forecasts, some related to the evolution of the pandemic, others to supply bottlenecks in some segments and other economic factors.
These are just a small part of the many interesting outcomes emerging from a recent in-depth analysis of Cu2 Consulting.
The study provides an overview of the total European demand for copper and copper alloys rolled products by the main alloy groups, discusses the changes in the competitive scenario, the many issues still open that could lead to further changes in the near future, and the evolution of the profitability of the European industry. Also, the study examines in detail 30 European countries, analysing, for each of them, both the demand trends and the positioning of the different suppliers (or groups of suppliers). The period covered by the study is 2005 to 2020, with quarterly forecasts for the two-year period 2021-22.
The 225-page multiclient study on rolled products in Europe was published in July 2021 and is ready for shipment.
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Photo in the title page by courtesy of the Wieland Group