Soaring energy prices are an existential threat to Europe’s metals industry

Europe’s metals industry has called on the EU for urgent action to prevent a collapse in the sector which faces an existential threat from soaring electricity and gas prices.

In a letter to senior EU officials, including European Commission President Ursula Von der Leyen, the European metals industry association Eurometaux wrote that “the business leaders of the European non-ferrous metals industry write together to sound the alarm about the worsening energy crisis in Europe and its existential threat to our future.

As much as 50% of aluminum and zinc capacity in the EU has already been taken out of service due to the electricity crisis, Eurometaux said in the letter. Significant reductions were also made in the production of silicon and ferroalloys, and other impacts were felt in the copper and nickel sectors, the association added.

“We are deeply concerned that the coming winter could deal a decisive blow to many of our operations, and we call on EU and Member State leaders to take urgent action to safeguard their industries. electricity-intensive strategies and avoid permanent job losses,” writes Eurometaux. in the letter addressed to the most senior leaders of all EU institutions.

Aluminum foundries in Europe have closed in recent weeks due to soaring energy prices. Some zinc smelters have also closed or reduced production. In addition, 27% of silicon and ferroalloy capacities in the EU have already been reduced, Eurometaux said.

The price spike has made electricity and gas costs ten times higher for these industrial production sites compared to a year ago, far exceeding the selling price of their products, Eurometaux said.

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“We know from experience that once a factory is closed it very often becomes a permanent situation, as reopening involves significant uncertainty and costs,” the association added.

The European Commission will soon come up with a set of immediate measures to tackle the energy crisis and help households and industries weather the turmoil in the energy market, said European Commission President Ursula von der Leyen said Wednesday. The proposed measures include a mandatory target for the EU to reduce electricity consumption at peak times, a cap on revenues for power generators and fossil fuel companies, and a cap on Russian gas prices.

By Tsvetana Paraskova for Oilprice.com

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