Output of copper and aluminium semi-finished products in Italy, a major European producer, is expected to fall this year as economic crisis and volatile metal prices hit demand, the director of Italy's non-ferrous metals association Assomet said. "We have a situation of general crisis, which starts with consumption and goes all the way up to production," Claudio De Cani told Reuters in a telephone interview on Tuesday.
"High prices are just adding fuel to the fire." Output of copper and alloy semi-finished products is expected to fall 2.4 percent to 1.033 million tonnes this year. Demand is seen stable at 1.046 million tonnes, but the figure takes into account that producers will rebuild their stocks after a drop in production last year, while end-user demand will be weak, De Cani said.
Production of aluminium and alloy semi-finished products is seen falling 4.7 percent to 783,500 tonnes this year, with apparent demand falling 5.6 percent to 763,500 tonnes, he said. The demand and production situation in both industries deteriorated sharply in the final quarter of last year, when Italy's economy turned sour amid growing concerns about the country's debt, De Cani said.
Italy's output of copper and alloy semi-finished products fell 4.8 percent year on year to 1.058 million tonnes in 2011, while its output of aluminium and alloy semi-finished products fell 2.8 percent to 822,000 tonnes, according to Assomet data. The euro zone's third-biggest economy contracted in the third and fourth quarters of 2011, underscoring the challenges for Prime Minister Mario Monti as he seeks to avert a debt crisis and turn around the economy. Austerity measures launched by Monti's government, including increased housing and value-added taxes, have played a part in discouraging consumer demand, De Cani said.