The Danish aluminium and metal supplier Alumeco, providing aluminium solutions for the metal-consuming industries are experiencing a fierce battle for raw materials, which has also risen in prices.
The COVID-19 pandemic has disrupted the balance of demand and supply. Since May’20, the price of aluminium has soared by 55%, while the price of copper has risen by 80%.
Jakob Jespersen, Sales Director, Alumeco, said: “We are reluctant to disappoint our customers, but the risk has become greater and greater in recent times when the battle for deliveries of everything from aluminium and copper to brass has exploded.”
“A very chaotic situation exists at the moment. There is a total imbalance in supply and demand. This has made it very difficult for us to keep items on the shelves and we risk having to disappoint customers”, said Jakob.
When the COVID-19 pandemic hit hard, the company expected demand would plunge both in Denmark and internationally, but the opposite has happened. The roaring demand has now started knocking on the doors of Alumeco.
“We had prepared for it to go slower, that's not exactly how it went. Orders are outbid and cancelled”, Jakob added.
However, Alumeco believes the development of a massive price rise is not the biggest problem. The issue is more that it has been outbid.
“You can no longer count on your orders being executed, because you may be outbid. It also means that we must disappoint our customers”, said Jakob.
In addition to the record-high demand, the Sales Director of Alumeco believes that the anti-dumping duty imposed by the EU on imports of aluminium from China will secure that there will be no longer the same supply as it used to be.
The Danish Industry is aware of the problems and acknowledges that the EU's anti-dumping duties and bounce-back from corona, among others in China, signifies that the demand for the raw materials is going to rise globally.
Peter Bay Kirkegaard, Chief Advisor, the confederation of Danish Industries, said: “There is no doubt that this puts several companies in a very difficult situation. Partly because production is becoming more expensive, partly because they simply cannot get the steel and aluminium they need.”
The most obvious solution to the problem would be to withdraw the anti-dumping duty on imports from China, but it is also true that the European steel and aluminium industry that does not want competition from China.
“At the same time, it is difficult to argue that we are simply opening up to the Chinese companies, which in many cases are supported by unlawful state aid, which we both from the American and European sides have decided to no longer find ourselves in”, says Peter Bay.
“At Alumeco, the expectation is that at some point there will again be a better match between supply and demand. The raw materials are very expensive at the moment, and of course, it also affects demand. At some point, the ends will probably meet. But we would like to know if it happens this summer or only much later, said Jakob Jespersen
Responses
