Aluminium foil buyers continue to downgauge

By Ahmed ElAmin

- Last updated on GMT

Related tags: Aluminium foil, Europe, European union

While exports of aluminium foil from Europe rose nine per cent in
2005, internal demand decreased by one per cent as manufacturers
continue to downgauge and source material elsewhere.

Shipments from European foil rollers reached an all time high of 839,000 tonnes, representing an increase of 0.5 per cent on the 835,300 tonnes in 2004, according to the European Aluminium Foil Association (EAFA).

Demand rose by nine per cent for deliveries outside the EAFA region, while domestic shipments decreased by one per cent.

"The drop in domestic shipments does not signify a fall in European demand but simply reflects a growth in imports from non-EAFA countries,"​ the organisation stated.

Data for 2005 also shows significant growth of thinner foil gauges while the thicker foils decreased.

Fourth quarter figures for 2005 were almost stable with an increase of 0.2 per cent to 201,100 tonnes over the same quarter in 2004, reflecting the trend across the year.

"The indications for 2006 are providing us with some optimism for continued slow but steady growth,"​ stated Stefan Glimm, EAFA's executive director. "The high demand from outside the EAFA region is a strong indication for the high quality and competitiveness of the European foil industry. On the other hand imports into EAFA countries are increasing as well showing that aluminium foil markets become more and more global."

About 75 per cent of aluminium foil is used for packaging. EAFA represents companies engaged in the rolling and rewinding of alufoil and in the manufacture of alufoil containers and of all kinds of flexible packaging. Its 130 members include companies in Western, Central and Eastern Europe.

The EAFA region covers Armenia, Bulgaria, Czech Republic, the EU15, Hungary, Norway, Russia, Switzerland and Turkey.

Aluminum demand outstriped supplies last year. Primary aluminium prices on the London Metals Exchange rose about 12 per cent in the first quarter of 2005.

The price fell dramatically in the second quarter but in the seven month period to the end of July rose by 5.5 per cent.

Analysts such as SB Citigrouop forecasts price increases will continue, averaging about four per cent. Price increases are expected to continue through to 2007.

Related topics: Processing & Packaging

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