Industrial businesses across Europe are experiencing significant stress and pressure as energy bills continue to climb. Adrian Musgrave, head of sales for Bridgnorth Aluminium, which makes rolled aluminium, described the situation as “just worry upon worry.”
The cost of natural gas has doubled in the last two months, reaching a three-year high in the UK and the EU this week. This surge is attributed to renewed fighting between the US and Iran, which has disrupted global energy supplies and choked off access through the Strait of Hormuz.
Bridgnorth Aluminium, located in Shropshire and employing 370 people, is already feeling the impact. Its combined gas and electricity bill is approximately £1.1m per month, representing 18% of its total costs. The company is considering a longer Christmas break or bringing forward planned maintenance to January to reduce factory operation during periods of high prices.
Europe is entering winter with gas reserves at their lowest level in over a decade, currently around 67% full compared to a seasonal average closer to 80%. The UK, which imports about 70% of its gas, is particularly vulnerable to price swings and has some of the lowest domestic storage capacity.
Alexander Julius, managing partner of Macrometal Handelsgesellschaft, a steel distributor in Hamburg, noted that energy is a fundamental production input for industries like his. Eurometal, a trade body, has warned that manufacturing job losses across Europe could reach 300,000 by the end of the year, partly due to Chinese competition and compounded by energy costs.