Euroalliages urges EU to support ferro-alloy sector

Published date: 09 August 2022

European authorities must provide targeted financial support to ferro-alloy producers that are struggling to survive the continent's acute energy crisis, industry association Euroalliages general secretary Ines Vanlierde told Argus.

Members of Euroalliages held meetings with director generals of the European Commission late last month to request electricity price caps and subsidies for electricity costs, and to convey the severity of the metallurgical industry's position, Vanlierde said.

"We are terribly impacted by the level of energy prices — if they keep climbing, we won't be able to compete," she said.

"This is probably the worst crisis we ever went through, because what I hear from Euroalliages members is that when they knock on their national authority's door… they sympathise and understand, but basically they are not doing a lot, or nothing at all for the time being," she said. "We are extremely frustrated."

The absence of a long-term unified response is not sustainable, Vanlierde said. "The problem is that policy between the member states is not harmonised," she said. Adding that "the lack of consistency creates an imbalance within the single market".

Some European countries have enforced energy caps to tackle soaring energy prices, although Vanlierde questioned the effectiveness of these existing measures, such as those in place in Spain.

Speaking last month, Spanish Euroalliages member Ferroglobe's chief operating officer Benjamin Crespy commented that "if we look at the manganese-based alloy business we currently have a significant amount of volume temporarily idled given the unprecedented level of energy cost in Spain."

"If the system were effective, we wouldn't face that situation," Vanlierde said.

In Spain and Portugal there is currently a 12-month cap on gas prices, agreed by the commission, ensuring that they remain lower than an average of €50/MWh. In Italy, there is 20pc tax credit in place for energy-intensive companies facing a 30pc rise in prices. France has put a cap on the state-owned energy provider for a year. Slovenia will also put a cap on prices from 1 September.

Support is understandably being prioritised for households, public healthcare

and renewable energy investment, but this leaves ferro-alloy producers in a dangerous position, Vanlierde noted.

Some Euroalliages members have already idled operations, "so we are running through a process where at this level of electricity price we cannot produce, and of course we cannot compete", she added.

"We have heard from high-level European officials, that the situation will not fundamentally improve until the end of next year, or early 2024, a statement which raises serious concerns regarding the future of electro-intensive industries in Europe and the implementation of green European ambitions as imports from high-carbon sources keep growing," she said.