FACTORIES IN SPAIN REDUCE PRODUCTION DURING SOARING ENERGY PRICES

FACTORIES IN SPAIN REDUCE PRODUCTION DURING SOARING ENERGY PRICES

FACTORIES IN SPAIN REDUCE PRODUCTION DURING SOARING ENERGY PRICES

Steel giant ArcelorMittal confirmed Thursday that the company would not reopen its factory in Bilbao, Spain, as expected this week due to high energy prices.

Borja Maestre- A spokesman from the ArcelorMittal Sestao factory said, “The price of energy is high, and it eats our margins, so the idea is not to restart production because we would probably lose money”.

This is only one announcement that could lead to unemployment and the production of the Spanish industry.

For the first time, paper producer Saica Group announced that they would close three of their four factories in Spain “Considering that gas prices have increased by 300% in Spain in just eight months.”

The other companies recently announcing production breaks or factory closings in Spain include Pames, Ferroglobe, and Michelin, which could lead to hundreds of layoffs.

In August, the price of electricity reached its highest in Spain even though there was a limit on the price of natural gas which according to the government reduced the cost by around 15%.

On Thursday, Spanish Prime Minister Pedro Sanchez announced that the government would soon reduce taxes on natural gas bills from 21% to 5% in October.

Although the Spanish government has excluded any energy rationing this winter due to the country’s low dependence on Russian gas, companies say they are not competitive during high energy prices.

Spain has passed two economic packages to facilitate the financial blows of inflation and the Russian War in Ukraine which costs around € 25 billion ($ 24.9 billion).

FACTORIES IN SPAIN REDUCE PRODUCTION DURING SOARING ENERGY PRICES