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A Coal Stock Worth Buying?

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Buying coal stocks is not…

Soaring Energy Prices Are An Existential Threat To Europe’s Metals Industry

The European metals industry has called on the EU for emergency action to prevent a collapse of the sector which faces an existential threat from surging power and gas prices.  

In a letter to the top EU officials, including European Commission President Ursula Von der Leyen, the European metals industry association Eurometaux wrote that “the business leaders of Europe’s non-ferrous metals industry are writing together to raise the alarm about Europe’s worsening energy crisis and its existential threat to our future.”

As much as 50% of the EU’s aluminum and zinc capacity has already been forced offline due to the power crisis, Eurometaux said in the letter. Significant curtailments have also been made in silicon and ferroalloys production, and further impacts felt across the copper and nickel sectors, the association added. 

“We are deeply concerned that the winter ahead could deliver a decisive blow to many of our operations, and we call on EU and Member State leaders to take emergency action to preserve their strategic electricity-intensive industries and prevent permanent job losses,” Eurometaux writes in the letter addressed to the most senior executives of all EU institutions.

Aluminum smelters in Europe have been closing in recent weeks due to sky-high energy prices. Some zinc smelters have also either closed or curtailed production. Moreover, 27% of the silicon and ferro-alloys capacities in the EU have already been curtailed, Eurometaux said. 

Surging prices have made electricity and gas costs ten times higher for those industrial production sites compared to a year ago, far exceeding the sales price for their products, Eurometaux said.

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“We know from experience that once a plant is closed it very often becomes a permanent situation, as re-opening implies significant uncertainty and cost,” the association added.

The European Commission will soon propose a set of immediate measures to address the energy crisis and help households and industries through the energy market turmoil, European Commission President Ursula von der Leyen said on Wednesday. The proposed measures include a mandatory target for the EU to cut power consumption at peak hours, a revenue cap on electricity producers and fossil fuel companies, and a price cap on Russian gas.  

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By Tsvetana Paraskova for Oilprice.com

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  • Hotone Ten on September 07 2022 said:
    I think a price cap on Russian gas is not going to lower the energy costs. After all, today, Europe is paying almost nothing for Russian gas (since the is no supply), but rather paying high prices to other source countries. Europe should put a price cap on gas from ALL countries - just say NO to price gouging.

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