The price of gas in Europe exceeded $2,400 per 1,000 cubic meters, reaching its highest level since March. The reason for the increase in gas prices in Europe is the drought and the decrease in the supplies from Russia by 20%.
European producers found themselves between two market trends due to the energy crisis that has covered the entire continent; low prices for metal products and high production costs, including energy. Energy costs usually make up 25-30% of processing costs, but selling finished products at low prices wipes out companies' profits.
The share of blast furnace and converter technology in steel production in the EU is around 60%. Producers were stuck as high gas prices led to exorbitant increases in electricity prices.
The EUROFER warned that the decisions taken by the European Commission regarding Russian gas may lead to serious consequences for the steel industry. The association said the EU should avoid interruptions in gas supplies until new alternatives are available.
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