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Global Economy

Gas prices at record levels – industry sounds the alarm

Tensions between Russia and Ukraine lead to higher energy prices. Industrial companies that consume a lot of energy are sounding the alarm about the price increase. They fear losses and plant closures.

The Dutch aluminum manufacturer “Aldel” in Delfzijl is also affected. No new metal has been produced since the beginning of October due to high energy costs:

“The mood is a bit depressed at the moment because 120 colleagues are to be laid off. But actually we still have hope here in the plant that we can continue here”.

Energy costs account for up to 40% of aluminum production costs. “Aldel” estimates that the cost of electricity alone is currently 4,500 euros per tonne of aluminium, while the selling price of aluminum is around 2,500 euros per tonne.

Prof. Machiel Mulder, energy expert at the University of Groningen, explains:

“Prices were already very high: in October because of the economic recovery, the lifting of corona restrictions and the increase in gas demand. But the current price increase is due to tensions with Russia, because most of the gas we get in Europe comes from Russia”.

Private consumers are also feeling the effects of the rise in energy costs. More and more suppliers are increasing their prices. Gas has increased in price by an average of 34 percent within a year.

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