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Economic performance

Revenues and recurring EBIT for Recycling were down 10% and 30% respectively, mainly due to the impact of lower metal prices. Lower demand in certain end-markets of the business units Jewellery & Industrial Metals and Precious Metals Management also had a negative impact on revenues and profitability of the business group.

In Precious Metals Refining, revenues and earnings were down year on year, due to lower prices of precious and specialty metals and a somewhat less favourable supply mix. Higher volumes were processed as a result of an increased throughput rate, which helped offset part of these headwinds. Processed volumes were up year on year, despite the preparatory engineering work and the first major phase of investments carried out in the Hoboken plant to expand capacity. These investments resulted in a higher throughput rate which more than offset the volume loss caused by the downtime.

The feed availability was robust across most segments and this supported a higher intake of material. The supply mix, however, was less positive reflecting a lower availability of pgm-rich material – partly due to the effects of the strike in the South African pgm industry in the first part of the year – and a somewhat reduced fraction of richer and more complex e-scrap. Umicore further strengthened its position in the market of spent industrial catalysts, while commercial conditions for spent automotive catalysts remained highly competitive throughout the year.

The Hoboken expansion program made good progress during 2014 and the effects of the throughput and efficiency improvements were already being felt. Further major investments will take place during two extended shutdowns in 2015. While the total production downtime will be longer than in 2014, the increased throughput rate after the investments is anticipated to compensate for the lost production days. Other modifications to the logistics at the Hoboken facility were made during 2014 to enable a higher throughput of materials at the plant. One of these involved the inauguration of a new loading facility to increase the arrivals of raw materials by barge via the River Scheldt, thereby reducing the volume of road traffic (see case study).

In Precious Metals Management, revenues were lower year on year. The contribution from the trading activity was lower due to the combined effects of less favourable market conditions and lower metal prices which, on average, were below the levels of 2013.

Industrial demand was also lower for most metals during the year. The only exception was platinum, with slightly higher demand from the automotive industry. However, this could not offset the reduced volumes for the other metals. Compared to 2013, there was also a decline in the market for gold and silver bars as investors looked towards alternative investments.

The Jewellery & Industrial Metals business unit recorded slightly lower revenues as higher revenues for the product businesses were more than offset by a lower contribution from the recycling activity. Refining volumes were impacted by a severe decline of available gold scrap compared to the previous year, although the volumes seem to have bottomed out towards the end of the year. The volumes of silver and pgm-containing residues remained stable.

Revenues from jewellery and lifestyle products were fairly stable in a challenging market, as the business unit benefitted from its good customer and product mix in that segment. Revenues for silver-based industrial applications increased slightly with a higher demand from the automotive and chemical industries. Investment demand was up with good demand for silver coins from European mint producers. Investor demand for gold and silver bars remained low.

The business unit  continued to make further capacity enhancements to its silver recycling activities in Bangkok, Thailand, to serve demand from its Asian customer base.

In Battery Recycling, Umicore further strengthened its position for the recycling of spent rechargeable batteries from electrified vehicles and successfully secured new contracts with (H)EV manufacturers. Umicore continues to optimize its processes in this long term market opportunity for both automotive and portable batteries.