European aluminium foil demand experienced a slower trend through 2023 than in 2022, resulting in a double-digit fall in the year's final quarter, according to the figures just released by the European Aluminium Foil Association (EAFA).
The entire 2023 reflected a unique circumstance of high stock levels and weak demand for aluminium as high prices and interest rates forced end-consumers to limit their metal purchase. It directly affected foil in packaging and household goods in particular.
According to EAFA survey, sluggish demand for European foil led to a 14.6 per cent year-on-year decline in shipments from 973,000 tonnes in 2022 to 831,700 tonnes in 2023.
Thinner gauges, primarily used for flexible packaging and household foils, were neither left untouched by the sluggish market and therefore, encountered year-on-year fall in deliveries by almost 16 per cent in Q4 2023. Exports were affected as well, declining by 30 per cent over the year. However, domestic deliveries were slightly better, growing by 13 per cent Y-o-Y.
Shipments of thicker gauges, which are mainly used for semi-rigid containers, technical or other applications, were down by 12 per cent throughout 2023. Exports also fell by 4 per cent and deliveries were 13 per cent lower than during the same period of the previous year. In Q4 alone, deliveries of thicker gauges were down by 20 per cent, while its exports were 40 per cent down year-on-year.
EAFA also showed that even foil used for technical applications had poor demand in Q4 2023, owing to general downturn in car production and building activity fuelled by continued high interest rates.
Bruno Rea, Chair of the EAFA Roller Group commenting on the figures said, “While uncertain economic conditions and continuing supply chain issues, such as disruption in the Red Sea, do not make these results unexpected, they are, nevertheless, not what the industry wants to see continuing for too long. As customer stock levels are now at very low levels there is very cautious optimism in the sector supported by market demand slightly picking up since Q1. Lower interest rates and stabilising economic circumstances certainly help to stimulate the strengthening demand further.”
According to AL Circle’s comprehensive report on “Aluminium Foil and its End Uses – Current Trends and Forecast till 2028”, aluminium foil demand in Europe is like to see a modest growth of about 1.6 per cent annually to reach over 1 million tonnes by 2028. Our in-house report also clearly indicated that factors like high interest rates and weakened demand for aluminium foil-dependent products would affect the overall European foil market of 2023, but in the forthcoming years, the demand would expectedly revive supported by the increasing usage of foil in Li-ion batteries. Industrial applications are estimated to drive the demand for European foil at a CAGR of 2.7 per cent between 2023 and 2028.
