Tense mood among German aluminum aerosol can manufacturers

Written on: August 31, 2022 by SprayTM

Exploding gas prices worry the industry

Deliveries to Germany still stable in the first half of 2022

Deliveries of aluminum aerosol cans and tubes to the German market still developed satisfactorily in the first half of 2022, according to Aluminium Deutschland e. V. (AD). Aluminum aerosol cans saw double-digit growth due to a significant increase in demand for deodorants and hair care products. However, overall volumes are still below the pre-COVID-19 pandemic level. Overall, deodorants account for about 60% of total shipments of aluminum aerosol cans to Germany.

In the case of aluminum tubes, demand from the pharmaceutical market, in particular, picked up again. As orders from the personal care/cosmetics and food sectors also developed positively, the market for aluminum tubes is stable overall at the previous year’s level. 

Due to the inflation-related loss of purchasing power by consumers, who are reacting to the economically tense situation with more price awareness, demand is shifting from branded to private label products, especially in the food and personal care/cosmetics markets.

Dramatic situation concerning the gas market

In addition to the still difficult transport services situation for various markets, which is putting the industry supply security to a severe test, the developments on the energy (and especially the gas) market are causing great concern among German manufacturers of aluminum packaging. The gas levy of 2.419 cents per kilowatt hour, which will take effect in Germany from October 2022 and distorts competition to the detriment of German manufacturers, is causing considerable additional burdens for domestic producers of aluminium packaging.

Johannes Schick, Chairman of AD’s Division of Tubes, Cans & Impact Extruded Parts, commented:

“Competitive gas and electricity prices are essential for aluminum production and processing in Germany. Stretching out the         gas levy over time and using the excess tax revenue that the state earns from high energy prices to provide corresponding                 relief for German industry could be suitable political countermeasures. An additional, burden could arise from the gas          consumption reduction of around 20% planned by the German Federal Ministry of Economics & Climate Protection. This is because such a requirement is likely to lead to cost-intensive electrification measures or even cutbacks in production in the industry, which already saves energy where it can, as energy costs continue to rise. The current and possible future burdens make it more difficult to make investments in the future that will secure jobs and thus impair the innovative strength and competitiveness of the industry in the international environment”

Uncertainty due to deteriorating consumer sentiment

The satisfactory order intake in the first half of 2022 has so far made the industry cautiously optimistic. This is due not least to the  enhanced recycling properties of aluminum, which provides convincing answers to the sustainability requirements of politicians, customers and consumers.

“However, if consumer sentiment and demand in the markets for fast-moving consumer goods deteriorate in the long term due to difficult economic conditions, the situation could worsen in the course of the second half of the year,” Schick concluded.

 

 

Spengler

Contact:

Gregor Spengler

Aluminium Deutschland e. V. (AD)

T + 49 211 4796-144

[email protected]