Volkswagen auto plant closes in Slovakia; Renault pulls down factories in France: Demand for secondary aluminium on hard brakes

The secondary aluminium is likely to be negatively affected post the German automaker Volkswagen declared on 15th March’20, that it will be suspending the production at its European output hub in Bratislava, Slovakia on 23rd march’20.

VW's move came after the Slovakian government declared a state of emergency earlier on Sunday due to the spread of the novel coronavirus.

There were reports of a suspected case of the virus at the plant, but that has not yet been confirmed by the company.

Secondary aluminium alloys, such as DIN226 in Europe, are used in diesel-engine cars, and production cutbacks will weaken demand for the material, according to some market participants.

VW's announcement comes after Europe’s largest secondary aluminium producer, Italy’s Raffmetal, which supplies material to Europe’s automotive sector closed its doors in a bid to halt the spread of the virus - the first of many expected closures in the north of Italy.

Italy has the most reported cases of the virus outside of Asia - 21,157 recorded cases and 1,441 deaths as of Sunday, March 15 while Slovakia has a much lesser 61 confirmed cases with no recorded deaths so far.

The emergency measures have been taken to stem the potential spread of contagion at Volkswagen’s plant which is the largest private-sector employer in Slovakia.

The spread of the virus in Europe is expected to exacerbate an already-troubled regional automotive market, sources said.

Renault said it would shut down its industrial sites in France from 16th March’20 evening until further notice.

The automaker stated: “it was suspending production to protect employees from the coronavirus outbreak and in compliance with the measures taken by the French government.”

Renault also added: “12 sites and 18,000 employees would be affected”.

The situation at other plants in Europe would depend on conditions in each country, the automaker said.

Renault Group, with 1.65 million sales in 2019, is the third-biggest automaker in Europe, following Volkswagen Group and PSA Group.

PSA Group earlier said: “it was closing all factories in Europe, joining other automakers including Fiat Chrysler Automobiles that have announced full or partial shutdowns.”

On 16th March’20 Renault pulled down factories at Palencia and Valladolid, Spain, for several days due to supply shortages.

The plant at Flins, near Paris, which makes the Renault Zoe electric car, was also closed for what Renault said were unrelated supply reasons.