Ann: Appendix 3Y - Low Ngee Tong, page-55

OFZ completely stops production due to high electricity prices

Slovakian bulk alloy producer OFZ had to completely stop production due to extremely high electricity prices and tough competition with relatively cheap products from non-EU countries.


Makes you realise how important energy costs are.
Mr Adrian Low refers to the low cost of their power and 20 year power agreement, the inflation in price is the 2.5%annual tariff increase, the power inflation around the world will be running close to 20% to 30%

“So the power contract is take or pay for 350MW of power and that’s locked in for 20 years, no moving parts. Obviously, there’s this inflation factor. But if you look at natural gas prices in Europe today, then that pales in comparison.
“Having power prices anchored at that very competitive level means that we are able to last through the cycle, and I think, for any alloy producer that’s the key, you can’t be a fly by night producer because no one would actually hedge their material with you.

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