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19 Aug, 2022 06:24

Commodity firms buckling under energy crisis – Bloomberg

Metals, fertilizer sectors are struggling as energy costs surge, says report
Commodity firms buckling under energy crisis – Bloomberg

The worsening energy crisis is piling pressure on vital commodities industries across the globe, Bloomberg reported on Thursday.

According to the article, energy-intensive sectors such as steel, fertilizers and aluminum are being forced to close factories or pass on soaring costs. The situation could get much worse this winter, when gas supplies are set to become even tighter, it notes.

“Europe has already lost about half of its zinc and aluminum smelting capacity over the past year, and more is set to go offline,” the outlet said.

In China, droughts have curbed crucial hydropower output and hurt smelter production. US suppliers have also been suffering, with major producer Century Aluminum planning to lay idle its massive Kentucky plant due to skyrocketing energy costs.

Power cuts in China’s Sichuan province have affected more than 70% of the local steel mills, which is putting pressure on prices of iron ore, which is used to make steel. In the US, at least two steel mills have started suspending operations to cut energy costs.

The report also highlighted that at least a quarter of Europe’s nitrogen fertilizer capacity is already thought to have been lost, with its global usage forecast to drop the most since 2008 next season.

Meanwhile, European sugar giant Suedzucker announced it has emergency plans to switch from gas to other energy sources if Russia halts flows. Analysts, however, warn that this could be an expensive process and could mean “even costlier sugar for consumers, further adding to grocery bills that jumped after global food prices hit record highs.”

For more stories on economy & finance visit RT's business section

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