Spain steel plants close over soaring energy prices

MADRID - Acerinox became the latest steel producer to halt operations in Spain on Thursday due to surging energy prices caused by Russia's war in Ukraine.

A union source at the Spanish stainless steel maker said the firm had halted production at its plant in Cadiz in the southern Andalucia region due to soaring electricity prices.

Electricity prices have hit record highs in recent days on the Spanish wholesale market, forcing Acerinox to push through plans to furlough all of its 1,800 staff at the Cadiz plant, he said. 

The unions, he said, were currently in talks with management to "negotiate the terms" of the so-called ERTE furlough scheme. 

The move came after a year in which the steelmaker's net profits soared to a record 572 million euros on surging global demand. 

Earlier this week two ArcelorMittal factories, both in the northern Basque Country, halted production over surging energy prices, a spokesman for the global steel giant said.

One plant located in Olaberria, with a 400-strong workforce, shut down for 15 hours on Tuesday due to "high electricity prices" which are weighing on production costs.

It resumed operations on Wednesday "but only intermittently" during off-peak hours when electricity prices were lower, he said. 

The group decided not to resume activity at a second factory with a 200-strong workforce in Sestao where operations had been due to resume Sunday after being idle for four days.

"We're following the price closely every day but we still don't know how long this situation of exorbitant prices is going to last," he said.

According to another industry source, "other steel plants" have also decided to halt production for several days, such as the Spanish group Megasa. 

Madrid has for months urged its European partners to change the mechanism which couples electricity prices to the gas market but its pleas have so far fallen on deaf ears, despite support from Paris.

But since Russia's invasion of Ukraine, positions have shifted with the question of electricity prices to be discussed at a two-day EU summit at Versailles near Paris which began on Thursday. 

In a statement, Fernando Soto, head of AEGE, which represents energy-intensive companies, urged the Spanish government to introduce "emergency measures". 

"Energy-intensive industries in Spain are suffering from the rising costs of electricity supplies" which have reached levels "never before seen in our market," he said on Wednesday, warning the sector's activity was "at serious risk".