European aluminium foil production remains flat in H1 2019; exports up by 34.6% : EAFA

European aluminium foil production has registered a modest increase of close to 1% in H1 2019 compared to the same period of 2018, according to the figures released by the European Aluminium Foil Association (EAFA). While European demand was slow, exports remained strong. Overseas sales have increased by 34.6% during January to June, more than double the figure sold in 2018.

YTD deliveries of thinner gauge foils, used mainly for flexible packaging and household foils declined 1%. Thicker gauges, used for semi-rigid containers and technical applications, were up by 4.2%, maintaining the bullish trend. However overall domestic demand decreased by 4.1% YoY.

Shipments in the period from April to June 2019 increased 2.9% from Q2 2018 to 245,300 tonnes. Thinner gauges reversed recent declines with an increase of 2.4%, while thicker gauge products increased by 3.9% in Q2. Deliveries outside Europe increased 58% in the quarter due to an improved export market.

“The fact that production levels are ahead of 2018 is encouraging. But export markets are notoriously volatile, particularly in current circumstances, when continuing trade disputes are weighing on international trade,” Bruno Rea, President of EAFA said.

“We would like to see European demand improve as it has been in decline during 2019. This could be due to a number of factors, such as de-stocking or cautious ordering patterns because of the uncertainties in the marketplace. There is a dramatic increase of foil inflow from China, severely impacting domestic production levels - the impact on the European supply and demand balance by imports from outside Europe is continuing to hurt the European Foil Roller industry,” he added.

Rea expects an improvement in order from European customers in next six months. He also expressed his happiness at the fact that European foils are in high demand from overseas customers.