June 2003
  The newsletter for buyers and suppliers of castings and forgings
     
  Germany, first producer of steel in Europe
 
     
 

First in Europe, Germany is the fifth producer of steel in the world; foundry sector is vital to Germany as it is directly linked to two of the biggest industries in Germany: the automotive industry and the mechanical-engineering industry.

Economic situation.

The German economy has been persistently weak for a number of years now. Since mid-2000, the growth trend has alternated between stagnation and recession, with at best intermittent phases of very modest recovery. However, the end of the war in Iraq will reduce the uncertainty of consumers and enterprises in Germany. Real gross domestic product showed only very weak growth in 2002, although, Germany managed to stay competitive within the European market.

Last year, the German economy was mainly sustained by exports, which expanded by around 5% over the course of the year despite only moderate world growth and the appreciation of the euro. By contrast, the weak domestic demand trend, which has been evident for several years now, persisted.

Location of the main consumer areas for the foundry products in Germany

Automotive industry

In 2001, the German automotive industry increased its production of passenger cars by 5% up to 5.3 million units, making the fifth year in a row when output figures topped 5 million. The truck production as well as the heavy truck production shrank by 1% and 7%. The automotive industry represents in Germany 30% of the total crude steal consumption, which amounted 44.8 million tons in 2001, a decline of 3.4% compared to 2000.

Mechanical engineering (machine manufacturing)

German mechanical and system engineering firms increased their production by 2% but new orders declined by 7%.

Construction sector

The building industry, in contrast, is giving reason to worry. Construction investment decreased by 5.8% compared to 2000, following the trend of the past 6 years. Housing investment, commercial building and public construction also declined. The negative development in the new German states (East Germany) in particular has a negative effect on the foundries.

The foundry industry

Production of castings in Germany

Total tonnage
2000
2001
+/- % 01/00
total production of castings
3.760 million
3.801 million
+1.1
mechanical enginering
1.026 million
+1.8
motor-vehicule production
1.905 million
+3.4
pipes and fittings  
251,000
-9.8
rolls  
65,000
-8.8
railway components  
40,000
+58.7
moulds
28,000
+ 14.2
castings for miscellaneaous applications
314,000
+2.3
components for construction applications  
173,000

-8.6%

Key data

Number of foundries in Germany:
- In 2002, 42.700 people were employed in 273 foundries, are mostly small or medium-sized enterprises, 81.0 % employ a workforce of 200 or less, while 5.9 % employ 500 or more people (2002).

Costs of development

Metals

Feed stock materials amount for 10 to 15% of the production, it means that any change in price is noticeable. The prices gradually decreased from the beginning of 2001 till the end of the year where scrap could be bought about 10% cheaper.
Exchange rate also have an influence on trade flows as exports for example would become uniteresting if the price of the Euro go up.

Personnel cost

Labour reprensents 50% of the cost of production, in 2001, labour cost has increased by 3% due to a new collective agreement and the new eco-tax rate.

Energy cost

Production costs:
-oil prices remained stable in 2001 after the heavy hikes of 1999 and 2000, high oil prices lead to high gas prices.
- electricity should increase by as mush as 1 cent per kWh, but renewed contracts sould increase by 20%.

Problems in the field of environment protection:

Waste avoidance was given priority over waste recycling and an other focal point is the translation of the modified European Waste Catalogue into German law.

The situation in the material sector

Total tonnage
2001
+/- % 01/00
iron
2.303 million
+2.7
nodular and malleable cast iron
1.309 million
-2.3
steel
189,000
+7.2
non-ferrous metals
830,000
1.3

Iron castings

total tonnage
2001
+/- % 01/00
motor-vehicule castings
1.249 million
+6.0
mechanical-engineering castings
660,000
+1.6
conctruction castings
168,000
-8.6
roll
18,900
-26.6
moulds
16,500
+7.3
pipes and fittings
1.156
+53.5
railway components
24,700
+109.4
miscellaneaous
154,500
-6.6
iron
2.303 million
+2.7

Nodular and malleable cast iron

total tonnage
2001
+/- % 01/00
motor-vehicule castings
651,500
-1.0
mechanical-engineering castings
303,400
+1.3
conctruction castings
4,600
-10.1
roll
11,300
-5.9
moulds
11,300
+26.1
pipes and fittings
249,600
-9.9
railway components
12,000
+18.7
miscellaneaous
65,000
-5.7
Nodular and malleable cast iron
1.309 million
-2.3

Steel

total tonnage
2001
+/- % 01/00
motor-vehicule castings
5,100
-5.0
mechanical-engineering castings
52,000
+8.6
roll
34,700
+4.0
railway components
3,100
+0.0
miscellaneaous
94,200
+8.7
Steel
189,000
+7.2

Non ferrous castings

total tonnage
2001
+/1 % 01/00
aluminium
645,000
+0.0
magnesium
26,000
+23
copper castings
86,800
-5.0
zinc
70,400
-10
Total
830,000
-1.3

In 2000, the German non-ferrous metal casters achived a record turnover, and in spite of the general decline of business in Europe and in the world, the production of 2001 only underwent a slight decline of 1.3%. The employment increased from 33,000 in 2000 employees to 34,500 in 2001.

The production of the non-ferrous foundries is driven by the intensive demand for light alloy castings that represent about three quaters of the non-ferrous metal castings. The high demand for magnesium originates from the biggest consumer of non-ferrous castings: the automotive industry.

But this situation is far from being global as nearly all production processes and all types of alloys suffered from a negative development mainly resulting from the difficult situation in the building, fittings and hardware industry, but also the general engineering and plant industry, as well as the electrical industry.

The prospects for the future of the industry are still seen in a positive light as many technical innovations provide new applications for light alloy castings (for instance in the automotive or electrical industries) and are promising good development chances for sthe foundries.

Also, German metal casters are enjoying a reputation of quality, flexibility and know-how that offsets many price disadvantage against foreign competition.

 

 
     
     
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