The European Import of Metal Parts and Structures
11.08.2016
According to CBI – Market Intelligence, the import of metal parts and structures from developing countries is going to be stable on short term. The West market offers opportunities to those producers that are able to compete with the big European companies and, in the same time, with the main suppliers in the field: China and India. The price, the quality and the level of added-value (extra services) plus a proper communication are essential for insuring the success of cooperation with Western Europe.
The value of imports coming from the developing countries was valued at 16 billion EUR in 2014 (10% more than in the previous year). The market share of the developing countries remained almost unchanged between 2010 and 2014 (between 13% to 15%).
The evolution registered in the last period is generated by the increase of imports in Germany, UK, Netherland, Norway, Poland and Italy.
Germany is responsible for one fifth of the total European imports of metal products. France is on the second place (10%), followed by UK and Italy (8% respectively 6%). When it comes to imports from developing countries the top looks a bit different. Germany is number 1 (22%), followed by UK (14%), Italy and France (9% each).
Top suppliers of metal parts and structures
As one can expect China is the main supplier of metal products. Other 8 countries dominate the top of exports to Europe: Turkey, India, Thailand, Vietnam, Malaysia, Serbia, Bosnia-Herzegovina and Tunis. These 9 countries cover 94% of the total exports of metal products coming from developing countries.
China is supposed to maintain its leading position in the next period of time, even so its development rate will be smaller than the one registered few years ago. The increase of exports to the European market values 2.2 billion EUR. Turkey registered an increase of exports of about 573 million EUR, followed by India (+398 million EUR), Thailand (+198 million EUR), Vietnam (+155 million EUR) and Bosnia Herzegovina (+91 million EUR).
Exports from Vietnam continue to grow. The same can be reported about the countries in South-Eastern Europe, especially Bosnia Herzegovina.
Top of metal products imported in Europe
The most relevant products coming from the developing countries refers to iron and steel castings.
The moulds represent one of the most important product groups, with high potential to increase in the next 10 years.
Basically:
Big opportunities are to be seen in the area of metal parts that involve a high degree of labour cost in the production process
Germany, France, and UK will continue to be the main importers during the next years. Even so, the access on these markets is not going to be easy.
Germany will continue to be number 1 European importer of metal components.
India and China own the technology for producing most part of the iron and steel castings as expected by the West European buyers. Other developing countries will have to face a strong competition and will have few chances unless they will be able to adapt their price strategies.
The moulds continue to be one of the most relevant product group imported in Europe
There are opportunities for producers coming from Eastern Europe as they can speculate the advantage of being flexible with the delivery terms and conditions this having a strong impact on the final production timings and transport costs.
Most part of the products exported to Western Europe is customized. A lot of deals come through subcontracting. This tendency will be maintained in the next years too.
Production
The European production of metal parts and structures is valued at 470-570 billion EUR. Around 4 million people are working in the sector. This reflects 10% of the entire labour force active in production related industries.
The market is dominated by SMEs. 400.000 companies are registered in the field out of which 95% are having less than 50 employees. This type of companies realizes 75% of the entire production.
France, Germany, Italy, Spain and UK generate 75% of the metal parts produced in Europe.
Even if the European producers are consuming 60%-70% of the steel production their negotiation capacity with the suppliers is relatively limited.
There is a clear difference between the companies form CEE and the ones from West Europe. The production coming from the first region involves a high degree of labour force in the process, the lower productivity level being compensated by the smaller salaries.
The last year that registered a positive trend was 2011. Starting with 2012 the sector was clearly affected due to the crisis, which had a relevant impact on the construction industry. A slight recovery was registered in 2014 and is supposed to continue in the same way on short term.
In conclusion:
The European market for metal products is mainly working through subcontracting parts of the production processes
In this context, Central and Eastern Europe is a relevant player capable to compete to any other developing regions that are providing products to this sector
The European market of metal parts and structures
The European market is valued at 470-570 billion EUR. The imports from outside Europe are balanced by the exports outside the region.
The most relevant groups of products are:
Moulds
Steel and iron castings
Metal components
Boilers, containers and packaging material
Subcontractors cover almost 60% of the total market. The rest of 40% is distributed directly to the end buyer. Most orders are coming from mechanical engineering, construction industry and automotive.
Therefore:
Each country has its own market segmentation
The main consumers are France, Germany, Italy, Spain and UK. An important part of the production is internally realized therefore opportunities for developing countries are limited.
