Released January 05, 2022 | galway, ireland
en
Written by Martin Lynch, European News
Editor for Industrial Info (Galway, Ireland)--Europe's record-breaking prices for power and gas is heavily impacting a number of the region's leading heavy industrial sectors, especially metals.
Europe's largest aluminium smelter in Dunkirk, France, has reduced output in recent weeks and recorded a loss of 20 million euro (US$22.6 million) since the start of November due to rocketing power prices. Output is down by almost 4% according to labour union representative Laurent Geeraert, at Aluminium Dunkerque Industries France, who told media that further production cuts are likely if power prices remain high. Fellow French company, Nyrstar, has placed its zinc smelter in Auby, France, on "care and maintenance" for the first week of January, blaming "significantly increased current and projected future power prices in France." This comes just months after the company confirmed that it was cutting production at its three European operations in Belgium, France and the Netherlands by up to 50% in response to high power prices in Europe.
The company stated: "Power prices, already at historically high levels across Europe, have continued to rise in recent weeks in France, in excess of neighbouring European countries. This is as a result of low availability of nuclear power, high carbon-related costs passed on by power companies and reduced fixed-price allowances for industry. The price outlook for electricity prices in France in early 2022 indicates continued high prices and significant volatility."
The trend is being replicated across many European metals plants. Last month, Industrial Info reported that Uniprom KAP's Podgorica aluminum smelter in Montenegro began to close down on December 15, blaming higher electricity costs. The shutdown of the 120,000-ton-per-year facility will continue through next week, resulting in the cancellation of two projects: an aluminum slab casting unit addition planned for 2022, and a wire, boards and profiles unit addition planned for 2024. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for the project reports.
In Romania, Alro Slatina (BVB: ALR), one of the largest aluminium producers in Europe and one of the largest energy consumers in the country, has started suspending primary aluminium operations due to power prices. The company confirmed that it will cut production by 60% by shutting three of its five electrolysis halls. President of the Alro Slatina trade union, Constantin Popescu, told Ziarul Financiar: "We are facing exorbitant prices in the energy market and a lack of energy in the market. We have already started the closure process. We can't find energy. We will close the production lines. We cannot produce at the price of US$2,300-$2,600 per ton of aluminium."
Europe's second-largest aluminium smelter, the 228,000 metric-ton-per-year San Ciprian plant in Galicia, Spain, has also been hit, and owner Alcoa Corporation (NYSE:AA) (Pittsburgh, Pennsylvania) has confirmed that it will halt primary aluminum production for two years, stemming from "exorbitant energy prices." The decision was agreed with workers who had been conducting strike action at the troubled plant and related refinery over recent months. The average spot market power price in Spain at the time was US$276 per megawatt hour (MWh) while in the U.K. it reached as high as US$450 per MWh. The San Ciprian smelter will still supply strategic clients in the food and pharmaceutical sectors by re-smelting aluminum, boosting billet production to 65,000 tons per year and making more than 25,000 tons of aluminium slab.
Power prices have been on the rise for months in Europe, driven by gas shortages, lower gas storage volumes and reduced supplies from Russia, which is responsible for supplying around 40% of the region's demand. Gas supplies from Russia are currently under the microscope as a number of European nations and experts have accused Russia of withholding supplies to force European authorities to certify the controversial Nord Stream 2 pipeline--which was developed by and is 50% owned by Russia's state-owned Gazprom (PINK:OGAZPY) (Moscow). For additional information, see November29, 2021, article--Europe's Gas Crisis Deepens.
Throughout 2021, gas prices have skyrocketed from roughly US$18 per MWh in January to more than US$165 per MWh towards the end of the year according to Dutch Title Transfer Facility, Europe's leading benchmark. The region's power problems are also being exacerbated by low nuclear power output from France, the largest nuclear nation in the European Union (EU). Électricité de France SA (EPA:EDF) (Paris) has halted operations temporarily at four reactors, accounting for 10% of the nation's nuclear capacity, citing safety reasons. For January, combined with maintenance operations at other plants, almost 30% of France's nuclear capacity will be offline, increasing its need for gas and coal-fired power.
In recent months, Industrial Info has reported on the negative impact that soaring energy prices across Europe have had on the steel and chemical sectors in the U.K. and other countries. Most recently, the Chinese magnesium supply shortage is having a major impact on many of Europe's leading heavy industrial sectors, including steel, automotive, construction, aluminum and mining. For additional information, see September 23, 2021, article--Soaring Gas Prices Hit European Chemicals and Steel Sectors and November 1, 2021, article--Europe's Magnesium Crunch Threatens Heavy Industry.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
Europe's largest aluminium smelter in Dunkirk, France, has reduced output in recent weeks and recorded a loss of 20 million euro (US$22.6 million) since the start of November due to rocketing power prices. Output is down by almost 4% according to labour union representative Laurent Geeraert, at Aluminium Dunkerque Industries France, who told media that further production cuts are likely if power prices remain high. Fellow French company, Nyrstar, has placed its zinc smelter in Auby, France, on "care and maintenance" for the first week of January, blaming "significantly increased current and projected future power prices in France." This comes just months after the company confirmed that it was cutting production at its three European operations in Belgium, France and the Netherlands by up to 50% in response to high power prices in Europe.
The company stated: "Power prices, already at historically high levels across Europe, have continued to rise in recent weeks in France, in excess of neighbouring European countries. This is as a result of low availability of nuclear power, high carbon-related costs passed on by power companies and reduced fixed-price allowances for industry. The price outlook for electricity prices in France in early 2022 indicates continued high prices and significant volatility."
The trend is being replicated across many European metals plants. Last month, Industrial Info reported that Uniprom KAP's Podgorica aluminum smelter in Montenegro began to close down on December 15, blaming higher electricity costs. The shutdown of the 120,000-ton-per-year facility will continue through next week, resulting in the cancellation of two projects: an aluminum slab casting unit addition planned for 2022, and a wire, boards and profiles unit addition planned for 2024. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for the project reports.
In Romania, Alro Slatina (BVB: ALR), one of the largest aluminium producers in Europe and one of the largest energy consumers in the country, has started suspending primary aluminium operations due to power prices. The company confirmed that it will cut production by 60% by shutting three of its five electrolysis halls. President of the Alro Slatina trade union, Constantin Popescu, told Ziarul Financiar: "We are facing exorbitant prices in the energy market and a lack of energy in the market. We have already started the closure process. We can't find energy. We will close the production lines. We cannot produce at the price of US$2,300-$2,600 per ton of aluminium."
Europe's second-largest aluminium smelter, the 228,000 metric-ton-per-year San Ciprian plant in Galicia, Spain, has also been hit, and owner Alcoa Corporation (NYSE:AA) (Pittsburgh, Pennsylvania) has confirmed that it will halt primary aluminum production for two years, stemming from "exorbitant energy prices." The decision was agreed with workers who had been conducting strike action at the troubled plant and related refinery over recent months. The average spot market power price in Spain at the time was US$276 per megawatt hour (MWh) while in the U.K. it reached as high as US$450 per MWh. The San Ciprian smelter will still supply strategic clients in the food and pharmaceutical sectors by re-smelting aluminum, boosting billet production to 65,000 tons per year and making more than 25,000 tons of aluminium slab.
Power prices have been on the rise for months in Europe, driven by gas shortages, lower gas storage volumes and reduced supplies from Russia, which is responsible for supplying around 40% of the region's demand. Gas supplies from Russia are currently under the microscope as a number of European nations and experts have accused Russia of withholding supplies to force European authorities to certify the controversial Nord Stream 2 pipeline--which was developed by and is 50% owned by Russia's state-owned Gazprom (PINK:OGAZPY) (Moscow). For additional information, see November29, 2021, article--Europe's Gas Crisis Deepens.
Throughout 2021, gas prices have skyrocketed from roughly US$18 per MWh in January to more than US$165 per MWh towards the end of the year according to Dutch Title Transfer Facility, Europe's leading benchmark. The region's power problems are also being exacerbated by low nuclear power output from France, the largest nuclear nation in the European Union (EU). Électricité de France SA (EPA:EDF) (Paris) has halted operations temporarily at four reactors, accounting for 10% of the nation's nuclear capacity, citing safety reasons. For January, combined with maintenance operations at other plants, almost 30% of France's nuclear capacity will be offline, increasing its need for gas and coal-fired power.
In recent months, Industrial Info has reported on the negative impact that soaring energy prices across Europe have had on the steel and chemical sectors in the U.K. and other countries. Most recently, the Chinese magnesium supply shortage is having a major impact on many of Europe's leading heavy industrial sectors, including steel, automotive, construction, aluminum and mining. For additional information, see September 23, 2021, article--Soaring Gas Prices Hit European Chemicals and Steel Sectors and November 1, 2021, article--Europe's Magnesium Crunch Threatens Heavy Industry.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities. Follow IIR on: Facebook - Twitter - LinkedIn.
