The recent developments in the Greek Metals Manufacturing industry

According to KPMG’s “The Future of Heavy Industry – Focus on Metals Manufacturing, Trends & Developments in the Greek Market” report the Basic Metals Industry turnover is on the rise with a Compound Annual Growth Rate of 6.2% from 2013 to 2019. This is largely due to increased exports and significant infrastructure projects.

During 2019, Basic Metals production contributed 0.63% towards the Greek GDP. Metals exports (including ores) comprised 8.4% of total Greek exports, the second largest export category after mineral products.

The Sub-sector is an important employer for the Greek economy as in 2021 the industry directly occupied more than 20 thousand individuals, which is 0.5% of Greece’s total workforce. 

Nevertheless, the subsegment is highly dependent on: 

• The energy and mining industries due to production significance 
• The construction industry since it strongly defines sales 
• Local and international legislation, as they may define both sales and cost

Raw material and energy constitute a major expense for companies within the subsegment. More specifically, price fluctuations of these production constituents have a major impact on operations.

The price of raw materials (scrap metal & ore), has increased sharply amidst the pandemic. From the start of the pandemic till June 2021 the price of aluminium increased 44%, of copper 79%, of Iron 137% and of steel scrap 75.6%.

For metal manufacturing companies, energy can represent up to 40% of the total operating cost. Taking that into consideration, COVID-19 disruptions that led to an increase in the price of resources used for energy production will significantly impact the sector.

Within the next decade, planned large-scale projects worth more than Euro 21.5 billion will boost sectoral sales. However, large-scale projects could also cause sudden spikes in local demand that would test the production and transportation capacity of the sub segment.

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