High energy prices are hurting the industry more and more. Aperam, which makes stainless steel, has not yet restarted its largest branch in Genk after the holiday break. “The site in Genk normally employs 1,250 people. Because we have not restarted, several hundred employees are now on temporary unemployment. There are still some people active in maintenance,” says Bernard Hallemans, CEO of Aperam Europe.
The site near Charleroi is also partially closed. The factories in Genk and Charleroi are the most important places where the Luxembourg Aperam scrap is melted into stainless steel.
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The reason for the shutdown is not far to seek: the high energy prices. “What we essentially do is collect old scrap and melt it down into stainless steel. We melt this mainly via high temperatures in ovens that run on electricity. After remelting, we also need gas for certain operations. So we use a lot of electricity and gas. Due to the high prices, we are now operating at a loss. To give you an idea: in the past we spent several tens of millions of euros a year on gas and electricity, at the current prices it is several tens of millions per month.”
Cheaper elsewhere
According to Hallemans, Aperam Genk will restart in September to complete existing orders. He fears for the future. “We cannot compete with players outside of Europe. Even within Europe, there are big differences in electricity prices.”
Hallemans points to a competitor in Northern Europe that, thanks to hydropower plants, pays much less for electricity than Belgium, where the electricity price is determined by the expensive gas plants. Competitors from Spain and Portugal are also paying much less because their governments have blocked electricity prices. “And then Europe imports another 40 percent of its stainless steel from outside Europe. In Asia, electricity prices have risen much less sharply. I don’t see the situation in Belgium improving any time soon. Prices keep going up.” (Read more below the photo)
“I do advocate state intervention, but we are also in a war economy.” — © Boumediene Belbachir
State intervention
Hallemans’ argument is in line with more and more experts who warn of a major structural loss of competitiveness in European industry due to high energy prices. If Aperam can no longer produce profitably, the stainless steel market threatens to fall completely into the hands of Asian or American players.
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The CEO is appealing to politicians in both Europe and Belgium. “First of all, it must be ensured that there are no too large differences in electricity and gas prices in Europe, as there are now.” He hopes that the Belgian government will temporarily adjust the price mechanism for electricity and that the electricity generated via expensive gas-fired power stations will no longer determine the price.
“Now there are parties that earn a lot of money from producing electricity, while their costs are not higher.” The CEO refers to the Belgian nuclear power plants and renewable energy producers. “I am indeed arguing for state intervention, but we are also in a war economy.”
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