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Italy

There have been fire and flames in recent weeks, with crazy LME copper pricing adding instability to a market that has already been abundantly tested. Non-ferrous metal price increases are threatening to compromise production restarts while making products less competitive. In this regard, it should be noted that national GDP dipped 0.4% in the first quarter (-1.8% in the previous quarter). However, this was lower than the decline experienced by the Euro area as a whole.

Domestic non-ferrous metals operators have positive expectations for both demand and production trends in the second quarter of 2021. In fact, there has been a gradual return to normality with plant capacity utilization reaching 74%, approximately two points higher than at the end of 2020 and not far from what happened in 2019.

The recovery in turnover has been significant given that materials stored over recent months are finally starting to be sold, thus accounting for an annual jump of 11.1%. For example, the automotive sector - which last year recorded a decline of 14% - is forecasting growth of 6.6% for 2022; meanwhile, the metallurgical sector, which recorded a 10.7% decline in 2020, is expecting growth of 4.3% next year.

The prolonged post-2009 crisis has strengthened the Italian production system which today is well-structured to face the recovery phase. Credit institutions are well-capitalized and, during the pandemic, were able to support businesses by protecting their recovery. It is clear that, if the production and banking system had been in poor health, companies would not have proved so resilient.

Exports were the pre-pandemic driving force of this process: Italian industry’s propensity to export was at 48% in 2019 versus 36% in 2010. The weakness of domestic demand had in fact pushed our companies towards exports, making them stronger and improving their competitiveness. In this economic transition, Italy is in an excellent position to take advantage of the recovery in global demand.