Novelis Expects Strong Aluminium Can Demand Thanks to Euro 2016

Novelis Expects Strong Aluminium Can Demand Thanks to Euro 2016
Spain national football team receives Euro 2012 trophy. Source: Wikimedia

Europe’s premier association football event is expected to boost demand on the continent for aluminium, as fans of the participating countries are expected to consume larger quantities of beer and soft drinks over the course of the competition, explained the chief of the world’s largest rolled aluminium company.

Novelis Inc. Chief Executive Steve Fisher told Reuters on Thursday that the 2016 UEFA European Championship, commonly referred to as UEFA Euro 2016 or simply Euro 2016, will likely significantly bump up the demand for rolled aluminium. The tournament will be held in France between June 10 and July 10. Twenty-four national teams, including defending champions Spain, will play in ten venues throughout the Republic.

Previous events of this caliber, including the 2014 FIFA World Cup “increase consumption of beer or other soft drinks in cans,” Fisher explained.

Atlanta-based Novelis supplies aluminium for drinks makers including Coca-Cola, PepsiCo, and the world’s largest beer brewer AB InBev, maker of over two hundred brands, including Budweiser, Corona, Stella Artois, Beck’s, Hoegaarden, and Leffe.

“We certainly hope to see that same trend for the European football championships this coming summer.” Fisher said. He went on to say that the firm is prepared to accommodate increased demand “if it comes”.

The firm produced 3.1 million metric tons in the just-ended financial year, which is an increase of two percent. Novelis credits it to increased demand from the transport, packaging, construction, industrial and consumer electronics sectors. Novelis intends to increase production to 3.4 million metric tons by the end of the current fiscal year, said Fisher

“Overall we are expecting healthy growth in the beverage can market, although a little bit different by region,” Fisher said.

He went on to say that his firm anticipates aluminium to continue to replace glass and steel in beverage packaging applications.

“In Asia we see strong growth for beverage cans, maybe not quite as strong as we were projecting a year or two ago, but still very healthy in the five to six percent range,” he said. Demand for aluminium cans in the United States was stable.

Fisher said that Novelis anticipates the compound annual growth rate for aluminium sheet use in the worldwide automotive industry of 20 percent between 2016 and 2020. He said that North America is leading the charge, but demand from the People’s Republic of China is coming on strong as well.

“There is a lot of excitement in the Chinese marketplace, specifically around the government push for more electric vehicles over the next five years,” said Fisher, adding that high aluminium content in these vehicles will increase ranges.