Europe’s commodity firms buckling under energy crisis

Bloomberg

Europe’s energy crisis is getting worse, piling pressure on the commodities industries that provide building blocks for the continent’s economy.
Power- and gas-intensive sectors such as steel, fertilisers and aluminum — the most widely used base metal — are being forced to close factories or pass on soaring costs to customers. Even sugar makers are feeling the pinch.
The tumult risks further squeezing households during the worst cost-of-living crisis
in decades and pushing economies into recession. Europe’s gas crunch deepened over the weekend as Russia decided not to turn the crucial Nord Stream pipeline back on after maintenance. If things aren’t bad enough now, they could get much worse this winter, when gas supplies are set to get even tighter.
Europe lost about half of its zinc and aluminum smelting capacity over the past year as jaw-dropping electricity prices make the energy-intensive production unaffordable. More capacity is set to go offline if the situation doesn’t improve.
Europe’s steelmakers are also being hit by higher energy bills, with those relying on electric-arc furnaces the worst affected. Many mills using those furnaces could remain offline following the end of scheduled summer maintenance.
Farmers in Europe are clambering to keep the world fed, and even-higher fertiliser prices and less availability could force them to use less, risking smaller harvests.
European sugar giant Suedzucker AG, which warned of higher prices as producers pass on costs, said it has emergency plans to switch from gas to other energy sources amid halts in Russian flows.