March 20, 2023

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European manufacturers are facing a contraction due to energy

European manufacturers are facing a contraction due to energy

Europe’s largest businessmen were looking forward to spring to cut high energy costs, but those hopes were dashed this week as Russian tanks entered Ukraine.
According to Bloomberg, smelters and chemical plants across Europe were already struggling before the invasion caused another rise in gas and electricity prices.

The list of companies warning that the energy crisis will continue to affect their bottom line in the future, including BASF C, Europe’s largest chemical producer, is now growing.

“Energy prices will remain high and will not return to normal any time soon,” said Martin Brடdermiler, CEO of BASF, Germany.

BASF has already lost 800 million euros ($ 900 million) due to rising gas prices in the fourth quarter of last year, and the situation could worsen if the US and Europe expand sanctions against Russia, which contributes more than 40% to the EU. Its natural gas requirements.

“It is very difficult to convert Russian gas to LNG from elsewhere,” Brutmமுller said.

It is noteworthy that BASF is not alone as the high energy mineral industry is also affected.

Aluminum, Dunkirk Industries France, Europe’s largest aluminum smelter, had planned to increase production by shouldering an 80% cost burden on the French government, but stopped a new price hike program after Russia’s invasion of Ukraine, a union official said. .

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