European industry faces shrink or shut decisions on energy pain

Bloomberg

Europe’s biggest industrial firms have been banking on spring to bring down soaring energy costs. Those hopes faded this week as Russian tanks rolled into Ukraine.
Smelters and chemical factories across Europe were already struggling before the invasion sparked another jump in gas and electricity prices. Now, a growing list of companies including Europe’s biggest chemicals maker BASF SE are warning the energy crisis will keep hacking away at their bottom lines for the foreseeable future.
“Energy prices will stay at a high level and they won’t go back to normal soon,” said Martin Brudermueller, BASF’s chief executive officer.
BASF already took an 800-million euro ($900 million) hit from rising gas prices in the fourth quarter, and the situation could worsen if the US and Europe broaden sanctions against Russia, which supplies more than 40% of the European Union’s natural gas. “It would be very difficult to replace Russian gas with liquefied natural gas from elsewhere,” Brudermueller said.
BASF isn’t alone. The energy-intensive metals industry is also struggling.
Aluminium Dunkerque Industries France, Europe’s largest aluminum smelter, had planned to ramp up curtailed production after the French government helped shoulder as much as 80% of the cost burden. But the renewed surge in prices following Russia’s invasion of Ukraine has put the plan on ice, a labour union official said.
Meanwhile, Germany’s Trimet Aluminium SE said manufacturing the metal isn’t economical at present energy prices. And building-materials giant HeidelbergCement AG warned that profits are likely to suffer from rising energy costs over the coming months.
European energy prices surged in the autumn, towards bankruptcy and prompting others to temporarily cut production at unprofitable factories.