n° 166 – May 2020

The headline of recent and coming weeks could be: when nothing is sure, everything is possible. The uncertainty around us is influencing the entire world economy.

For its part, the German economy is expected to shrink this year for the first time since the financial crisis in 2008 - by anywhere from 3% to 10%. Already, an additional 400,000 people are unemployed compared to 2019 and over 10 million workers have been put on short time under a scheme which allows hard-up firms to furlough employees or to reduce their hours while the German state replaces part of their lost income. Many companies received immediate support in the form of cash or other incentives. But as we all know, someone will have to pay that bill one day.

The automotive industry has restarted production but it is uncertain how many cars will be sold in 2020. The industry expects a new programme like the one launched in 2009 whereby the government paid over money when a customer was buying a new car. Will this be enough? Meanwhile, Lufthansa says that 95% of flights have been cancelled and the majority of planes are parked on German airport runways. The same airports are very likely to go bankrupt soon if travel remains this restricted for much longer.

The problems encountered by the above-mentioned industries have led to less demand for aluminium and to smelters reporting production at below full capacity.

In Germany, no clear picture is expected to emerge before the third quarter as regards if and how fast the economy will recover. The good news is that, week by week, scrap activity is increasing and hopefully more scrap will be available soon. In particular, granulators and other processing companies which have invested considerable amounts of money in recent years are facing a major shortage of input materials.

Hopefully, we will soon reach the end of this period and be able to see each other again. We remain strong as an industry and firm in the knowledge that recycling remains key to protecting our world.

Murat Bayram - Murat Bayram (Germany)

Murat Bayram

European Metal Recycling Limited (GBR), Board Member of the BIR Non-Ferrous Metals Division

n° 166 – May 2020