Europe’s soaring costs for electricity have claimed another victim, with Norsk Hydro ASA planning to shutter an aluminum smelter in Slovakia at the end of next month.
(Bloomberg) — Europe’s soaring costs for electricity have claimed another victim, with Norsk Hydro ASA planning to shutter an aluminum smelter in Slovakia at the end of next month.
The closure of the Slovalco facility adds to growing signs of stress across European industries including metals, as power prices surge to record highs. On Tuesday, zinc prices rallied after one of the region’s biggest smelters said it would suspend output next month.
Norsk, Slovalco’s majority owner, said the closure was a response to adverse conditions including “high electricity prices, which show no signs of improvement in the short term.” The smelter was running at 60% of its 175,000-ton annual capacity, and would suffer substantial losses if it continued operations beyond 2022, the Norwegian firm said.
Industries from fertilizer to aluminum are being crippled by soaring energy costs as Russia squeezes gas flows to Europe following its invasion of Ukraine. Benchmark power prices surged to a fresh all-time high Tuesday as the worst energy crisis in decades looks set to persist well into next year.
Investors are also monitoring power issues in China, where Sichuan province — a significant aluminum hub — is rationing electricity amid soaring temperatures.
Aluminum rose as much as 1.8% on the London Metal Exchange to $2,435 a ton and traded at $2,432 by 1:56 p.m. Shanghai time. Zinc, which hit a two-month high on Tuesday, fell 0.5%.