Deliveries of aluminium foil for the first six months of 2023 saw demand drop 9.4 % to 444,000 t, with both domestic deliveries and exports down. Figures for the second quarter of the year dipped by 15 %, compared to Q2 2022, as the impact of weak demand and the resulting destocking continue to be felt, according to figures released by the European Aluminium Foil Association (EAFA).
This double digit decline also reflects the spike in demand seen last year in the same period, which recorded the highest ever quarterly volume, thanks to exceptional post-Covid demand. Overall production in Q2 2023 totalled 212,300 t (2022: 249,400 t).
Thinner gauges - domestic and foreign markets slump
Thinner gauges, used mainly for flexible packaging and household foil, saw demand decrease in Q2 by 14 % in domestic markets and almost 30 % outside Europe. The six-month figures were down 10 % in Europe and 17 % elsewhere. The effects of a return to more regular consumption patterns and the impact of continuing high inflation and rising interest rates have seen weak demand continue in the packaging and related sectors. Companies along the supply chain continue to reduce their inventories and remain cautious.
Thicker gauges – down in domestic markets, but up in exports
For thicker gauges, used for semi-rigid containers, technical or other applications the story is partially similar. Deliveries in the three months to end June were down 15 % overall and half-year figures down 11 % for domestic markets but up 40 % in exports, as a spike in overseas demand in both Q1 and Q2 pushed demand in the first six months for these gauges into positive territory. As more Asian production comes back on stream, these export deliveries are expected to normalise. This category of export products makes up a small volume of the total production, therefore its impact on overall output figures is less.
Industry expects positive impulses early in 2024
Reviewing the figures Bruno Rea, chairman of the EAFA Roller Group, said: “Following the pattern established in Q1 these numbers are in line with expectations and reflect current situations affecting the global economy which are outside our control. In addition, the figures for 2022 were exceptional as the world recovered from Covid and both consumption and demand for all kinds of commodities using aluminium foil skyrocketed.”
“Recoveries are never straightforward and while tensions around the globe remain high and inflation here in Europe and other important markets remains above normal we maintain a cautious outlook for the rest of 2023,” he continued, adding: “However, there are signs inflation is coming down and this accompanied by governmental programmes to alleviate pressure on energy prices should have a positive impact on consumption by early 2024, or even slightly before then. Aluminium foil manufacturers remain resilient to meet these challenges, as they have done in the past.”
Weak demand and high stock levels continue to push aluminium foil deliveries lower in the third quarter of 2023.
The members of Aerobal, the organization of aluminium aerosol can manufacturers, were able to improve the number of global deliveries by 6% to around 6.4b units in 2023.
Global shipments by Aerobal members increased to just over 3.2bn units in the first half of 2023.