Speira GmbH is the latest European aluminum producer to reduce production in response to soaring energy costs that the industry says are an “existential threat” to its survival.
(Bloomberg) — Speira GmbH is the latest European aluminum producer to reduce production in response to soaring energy costs that the industry says are an “existential threat” to its survival.
Speira will cut production at its smelter in Germany by 50% to 70,000 tons a year until further notice and will look to source metal externally to feed its processing plants, it said on its website.
The curtailment adds to the extreme toll that the energy crisis is having on Europe’s metals industry, which is one of the biggest industrial consumers of power and gas. The region’s aluminum and zinc production capacity has fallen by about 50% within the past year, and more cuts are being planned — Norsk Hydro is preparing to close a smelter in Slovakia, and Europe’s largest aluminum smelter said on Tuesday it will also reduce production this month.
Read: Europe’s Top Aluminum Plant Will Cut Output 22% on Energy Costs
A group representing the region’s biggest metal producers wrote to European Union politicians on Wednesday warning that the energy crisis could cause “permanent deindustrialization” in the bloc, unless a package of support measures are implemented. Along with aluminum smelters, zinc and steel producers have curtailed production output significantly in recent months.
“We are facing similar challenges as many other European aluminium smelters,” Speira CEO Einar Glomnes said in a statement. “Energy prices have reached too-high levels over the last months, and we don’t foresee those to fall in the short-term future.”
Speira expects the curtailment process to be completed in November, and it doesn’t plan to make forced job cuts, it said. The company told Bloomberg it was considering the move last month.
European aluminum production has already dropped to the lowest levels since the 1970s and industry insiders say the escalating energy crisis could mean large swathes of the region’s aluminum capacity is switched off permanently. Some smelters are protected by government subsidies, long-term electricity deals or access to their own renewable power, but the rest face an uncertain future.
In its letter on Wednesday, industry group Eurometaux called on politicians to “look at all available options” to safeguard the sector, including measures to reduce prices from fossil-fuel generators, and an expansion of state aid relief.
The EU should also evaluate “options for temporary solidarity measures to rebalance the windfall profits in other specific sectors during this crisis,” the group said in the letter, which was signed by 40 of the region’s leading metal producers and processors.
(Updates with more details throughout.)
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