December 15, 2021 – Eurozone industry gets off to a strong start in Q4 2021. The production of industrial goods in particular picked up. EU aluminum premiums increased further. Explosion at US stainless steel facility leads to production stoppage.
Eurozone industry off to strong start in Q4 2021
In October 2021 compared with September 2021, seasonally adjusted industrial production rose by 1.1% in the euro area and by 1.2% in the EU, according to estimates from Eurostat, the statistical office of the European Union. Compared with October 2020, industrial production in October 2021 increased by 3.3% in the euro area and by 3.6% in the EU.
Cost of ocean freight from Southeast Asia eased slightly
Although the crisis is far from over, the waning of the summer covid-19 wave in Southeast Asia has eased some of the supply-side challenges – ocean freight prices, for example, eased slightly.
Strongest growth in sectors affected by shortages
Not surprisingly, the industries most affected by input shortages posted strong growth: Production of capital goods rose by 3.0% and that of consumer durables by 1.7%.
Manufacturing sector driving growth in the euro zone
We see the manufacturing sector as the growth engine in the euro zone for 2022, with order backlogs remaining at a historic high. Investment by shipping lines in new container ships could help logistical problems slowly improve during 2022. However, with pent-up demand from industries in the euro zone and the United States, global supply of steel, stainless steel and aluminum is likely to remain manageable.
Aluminum premiums rise in Europe
Aluminum premiums in Europe rose Tuesday, Dec. 14, amid a more favorable supply-demand balance and spreads on the London Metal Exchange. To that end, supply of duty-paid aluminum is currently only at about 50% of otherwise available volumes. Especially the high-purity aluminum alloys are currently in high demand and in tight supply.
Explosion at US stainless steel plant
An explosion occurred last week at a US stainless steel facility in Bridgeville, Pennsylvania. According to the company, the explosion was caused by a crane failure. This had spilled hot liquid metal during its failure. One worker was slightly injured. The plant is expected to be down for several days.
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