The war in Ukraine cre­ates con­sid­er­able uncer­tainty, caus­ing the FISI to drop in March. This is so far less related to a worsened assess­ment of cur­rent busi­ness situ­ation but rather to pess­im­istic expect­a­tions for the upcom­ing six months.

The fact that the FISI in Feb­ru­ary reached its highest value since pre-Corona June has no sig­ni­fic­ance in view of the Rus­sian inva­sion of Ukraine. The prom­ising data were col­lec­ted before the out­break of the war. The sig­ni­fic­ant mar­ket dis­rup­tions and their impact on European foundries will become vis­ible in the data in March.

The European foundries have left the dif­fi­cut second half of the pre­vi­ous year behind for the time being. Although high energy prices and Rus­si­a’s aggress­ive beha­viour con­tinue to pose high risks for the European industry, European foundries from all mater­ial classes rate both the cur­rent busi­ness situ­ation and the expect­a­tions for the next six months bet­ter than in the pre­vi­ous month. The latest eas­ing of corona restric­tions is pre­dom­in­antly welcomed. 

After recent signs of a com­pre­hens­ive slow­down, steel, iron and non-fer­­rous metal foundries assessed the cur­rent situ­ation in Decem­ber as sig­ni­fic­antly bet­ter than in the pre­vi­ous month. Expect­a­tions for the upcom­ing six months do not, how­ever, take this select­ive assess­ment into account.

While the assess­ment of the cur­rent busi­ness situ­ation for non-fer­­rous metal foundries has already been deteri­or­at­ing for months, a sig­ni­fic­ant set­back is now also set­ting in for iron foundries. Fur­ther rising costs for a vari­ety of raw mater­i­als and energy are put­ting a great bur­den on foundries.

Con­tinu­ing prob­lems in the global sup­ply chains and the related prob­lems in the auto­mot­ive industry in par­tic­u­lar threaten to limit the recov­ery of the foundry industry and do not bode well for the first quarter of 2022. Mean­while, the hor­rendous costs for raw mater­i­als and energy are caus­ing tre­mend­ous dif­fi­culties in eco­nomic pro­duc­tion for the energy-intens­ive foundry industry at the begin­ning of winter. This con­stel­la­tion is reflec­ted in the sharpest month-to-month decline of the FISI since April 2020.

European foundries’ expect­a­tions for the next six months are under pres­sure. On the one hand, explod­ing raw mater­ial and energy costs have been accom­pa­ny­ing the com­pan­ies for months. On the other hand, in addi­tion to the semi­con­ductor crisis, the auto­mot­ive industry could soon be con­fron­ted with short­ages in the sup­ply of mag­nesium and alu­minium, just like many non-fer­­rous metal foundries.