Market

Potential impact

The main industries served by Umicore are automotive (clean mobility materials, recycling), consumer electronics (rechargeable battery materials, recycling, coating and electroplating solutions) and non-ferrous metal mining and refining industries (recycling activities). Umicore is sensitive to any major growth or global reduction in activity levels or market disruptions in these industries.

Change in context

The global macro-economic outlook deteriorated significantly in 2019, particularly in the automotive sector. Trade and consumer confidence continued to decline given geo-political and trade tensions, uncertainty about Brexit, the slowdown of subsidy schemes and tariff implementations.

There was a significant contraction in global car production in 2019 – the strongest decline in car production since the 2008 recession. The biggest reduction was observed in the world’s largest car market, China, which contracted for the second consecutive year. Diesel car production continued to decline in Europe. More stringent vehicle emission legislation coming into force in key regions and the market share of gasoline particulate filters increasing in Europe and China should provide a longer-term uplift.

The risk profile reflects growing exposure to the automotive industry and to Asia, in both cases driven by the sales of cathode materials for use in electrified vehicles. Umicore should continue to benefit disproportionally from the accelerating penetration of electrified vehicles given our broad portfolio of cathode material technologies certified for the most stringent automotive requirements, our industrial-scale production capabilities and our qualifications on over 20 platforms. In consumer electronics there was also a slowdown in demand which was caused by destocking across the value chain. In the energy storage market in Korea, demand was very much down, owing to safety incidents on certain installations. In recycling our process remains unique, giving a stable outlook in this high-value market, especially with increasing availability of complex secondary materials. Also, China’s green fence policy resulted in higher  availability of end-of-life materials, such as printed circuit boards.

Measures taken by umicore

Umicore is delivering on its growth strategy in clean mobility materials and recycling. As a result, Umicore delivered strong results in 2019 despite unfavorable conditions, having already reached the Horizon 2020 targets two years ahead of schedule. In recycling, a continuous program of new investments optimizes performance and enhances environmental impact. For more information, see Driving Economic Performance.