Demand for raw materials in Germany continues to drop

Given the weak state of the German economy the demand for raw materials continues to fall, with both domestic production and imports declining again last year, a report released on Monday showed.

Domestic production of mineral raw materials dropped to a new low of 475 million tons, down from 534 million tons the previous year, according to a report by the Federal Institute for Geosciences and Natural Resources (BGR).

The fall in demand for domestic mineral raw materials and related products was due to the economy's prolonged weakness, said BGR vice president Volker Steinbach.

High interest rates, continued inflation and elevated energy and transport costs were weighing on industry and had led to lower overall demand for raw materials, Steinbach added.

Over the past five years, domestic raw material production has fallen by around one third. Imports also declined last year, slipping 2.8% to 288 million tons from an already weak level the previous year, the report showed.

Imports of energy commodities such as coal, oil and gas fell in particular, while imports of metals and non-metallic raw materials rose slightly compared with 2023, the BGR reported.

Sand, gravel and crushed natural stone remained the most important domestic raw materials by volume at 211 million tons, although that was more than a quarter less than in 2020.

Output of energy resources also continued to decline, with lignite production falling about 10% year on year to just under 92 million tons, while natural gas output dropped nearly 4% to 4.7 billion cubic metres.