Swiss long steel products maker Stahl Gerlafingen told Switzerland’s NZZ am Sonntag on Sept. 4 that it will reduce its operating hours during the months of October to December in the face of sharply rising energy prices, adding that the move has been approved by the government of the canton of Solothurn in the northwest of the country.
Stahl Gerlafingen, which producers wire, wire rod and other long rolled steel products for the construction of houses, bridges and tunnels, estimates that it will have to pay roughly CHF45 million ($45.9 million) for energy in October, more than its usual bill for a whole year.
The electric arc furnace-based company buys electricity on the open market and said it needs around 360 GWh/year — as much as 70,000 households or the city of Bern would consume. The company added that its natural gas needs, used in rolling operations, are 450 GWh/year — enough to heat 16,000 single-family homes.
Stahl Gerlafingen declined to add any further details when contacted by S&P Global Commodity Insights.
According to NZZ am Sonntag, Stahl Gerlafingen said it is concerned that, if the inflated costs are passed on to the market, its steel will be less affordable for the construction industry, and building companies will instead import cheaper steel from Italy, Spain or France, where the steel producers are supported by the state.
In addition, Stahl Gerlafingen said that its managers have sent a letter addressed to several state secretaries and parliamentarians proposing a cap on the price of electricity for industrial users between Oct. 1 and March 31. The measure would give companies planning security and help them avoid stopping production, the company said.
Stahl Gerlafingen is part of Italian group Beltrame and has an annual steelmaking capacity of 700,000 mt. Its daily production totals 2,600 mt/year, which annualizes to over 920,000 mt/year, but due to annual maintenance campaign, its actual yearly output is smaller.
On Sept. 2, in response to weak demand in the European market, as well as surging energy and emission costs, ArcelorMittal announced plans to temporarily shut three blast furnaces this month at three mills in the EU — in Bremen, Germany, in Gijon, in Spain and in Dunkirk, France.
— Ekaterina Bouckley