Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

European Industry Shuts Down as Power Prices Hit New Highs

Commodities Aug 17, 2022 05:58AM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters
 
NHY
+2.82%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NYR
-0.47%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
GAZP
0.00%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
POOL
+3.00%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NHYDY
+6.27%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Geoffrey Smith 

Investing.com -- European power prices continued their relentless rise on Wednesday, putting yet more pressure on the continent's industry.

Day-ahead baseload power prices rose to 563.76 euros a megawatt-hour in Germany and 553.62 EUR/MWh in France, according to exchange operator Nord Pool, as shortages of natural gas and low river levels continued to plague the continent's generators. 

Futures contracts for next year don't indicate any easing of the pressure any time soon. Baseload power for Germany in 2023 rose to 513.5 EUR/MWh on the European Energy Exchange and stayed at 676 EUR/MWh for France - both figures at multiples of the levels that prevailed before Russia's invasion of Ukraine in February. 

The energy crisis is having increasingly visible effects on industrial production in the region. Earlier on Wednesday, Norwegian power and metals group Norsk Hydro (OL:NHY) said it will suspend primary aluminum smelting at its Slovalco mill in Slovakia, due to high power costs. It said recycling operations would continue, but the mill - which was already only working at 60% of its 175,000-ton annual capacity - will only reopen "if the market and framework conditions allow".

That news comes a day after Belgium's Nyrstar (EBR:NYR) said it will put its Budel zinc smelter in the Netherlands into a care-and-maintenance program from September, citing similar cost pressures. 

European power prices had fallen briefly on Tuesday after The Wall Street Journal reported that Berlin is planning to let Germany's last three nuclear power plants keep running beyond their scheduled closure dates at the end of the year. However, they quickly recovered after the Economy Ministry denied the report. 

There was more bad news earlier on Wednesday when Uniper (ETR:UN01), the German gas importer and distributor reported a 12.4 billion euro loss for the first half of the year, accumulated as it was forced to buy gas on the spot market at sky-high prices to make up for the shortfall of cheaper Russian gas. Gazprom (MCX:GAZP) is currently sending only 20% of its contracted volumes to Germany, citing technical and bureaucratic problems that the German government says are politically motivated. 

Those developments have overshadowed more promising news on the supply front from Germany this week. Economy Minister Robert Habeck said on Tuesday that two floating regasification facilities designated for the Brunsbuettel and Wilhelmshaven ports on the North Sea would be operational by the start of 2023, significantly increasing Germany's ability to accept liquefied natural gas. That will give Europe's largest economy a greater safety margin if - as many expect - Russia completely stops gas supplies over the winter.

Germany is also making better-than-expected progress in filling its gas storage facilities ahead of the winter heating season. Bundesnetzagentur, which oversees the country's energy networks, said Germany's gas storage facilities were 77.3% full as of last week, in line with their multi-year average despite the fact that Russia is only sending 20% of its contracted volumes to the country at present. 

The government's target is for storage to be 75% full as of Sept. 1, rising to 85% by the start of October and to 95% by the start of November.

European Industry Shuts Down as Power Prices Hit New Highs
 

Related Articles

Oil Prices Rise to Near $90 as OPEC Cut Looms
Oil Prices Rise to Near $90 as OPEC Cut Looms By Investing.com - Oct 03, 2022 7

By Ambar Warrick  Investing.com-- Oil prices rose further on Tuesday as markets positioned for the biggest supply cut by OPEC since the 2020 COVID crisis, with weakness in the...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email