Posted on 08 Sep 2022
Germany's Wirtschaftsvereinigung Stahl (steel trade association) has called for 80pc of industrial users' gas consumption to be capped at a "competitive level", adding that for the remaining 20pc, price signals from the market would provide sufficient incentive for buyers to limit their consumption.
The association estimates that higher gas and electricity prices will increase the German steel industry's energy costs by more than €10mn this year compared to 2021.
The German government's third package of relief measures for high energy prices announced at the weekend, which includes the introduction of a revenue cap in the electricity market, does not do enough to prevent long-lasting damage to the industrial foundations of Germany's economy, warned the Wirtschaftsvereinigung's president Hans Jurgen Kerkhoff.
Spiralling energy costs and their effect on steel demand have already led to significant cuts to steel output in Europe, including major steelmaker ArcelorMittal idling a 1.2mn t/yr blast furnace in Bremen and a 900,000t/yr direct reduction plant at its wire rod mill in Hamburg. Confirmed output cuts to date amount to over 14mn t/yr of crude steel production capacity (see map), according to Argus estimates. Russia's state-owned Gazprom's decision over the weekend to indefinitely halt gas deliveries to Germany through the Nord Stream 1 pipeline will add to the pressure on the industry.
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Source:Argus Media
