The latest squeeze on energy supplies has hit German industry hard. Smelters who did not secure a long-term energy supply contract are facing difficult times. In fact, smaller foundries are running out of cash and some might even go bankrupt.
Secondary aluminium producers’ capacities are reduced and sales of ingots within Europe are reportedly difficult. The biggest aluminium producer in Germany has announced that it is more profitable to trade its long-term contracted energy supply to other companies than to produce aluminium. Official 226 ingot prices are on a downtrend; however, with very slow supply of metals from recycling, prices have become somehow frozen at a certain level. The big drop in ferrous prices has led to less metal collecting by the very small suppliers; when these smaller operators don’t collect ferrous, they also don’t supply non-ferrous which makes up roughly 10% of their business.
In general, increased energy prices are resulting in higher discounts across all the metals. These are challenging times for the whole industry, but the greatest difficulties usually arise right before the greatest breakthroughs. The positive message amid all this troubling news: the transition to a green economy can only happen with our metals from recycling. So no matter who is talking the market down, we should remember the importance of the role of recycling and keep smiling.