A perfect storm for the European metals industry – high energy prices, tight labour market, and weakening demand. We have seen nonferrous production curtailed across the whole continent as gas prices have soared. At the same time, metal prices have been in decline from their recent highs as demand forecasts are continually set lower.
Consumer sentiment could not be worse as people are receiving their utility bills. Despite massive government subsidies to industry and consumers, prices are still significantly higher than 2021. There is no doubt that this will impact demand.
As we run up to the annual negotiations for metals, many must be scratching their heads as to what to do. Decreasing supply, decreasing demand, and stubborn inflation. Traditionally, nonferrous producers have looked to sell anywhere between 70-80% of production under these annual contracts. Will that be possible for 2023?