Metallurgy / Chemicals / Rubber & Plastics

According to the observation of Huacheng's import and export data, the soaring energy cost in Europe has led to the closure of many enterprises, which may lead to the economic recession of the entire EU. However, not all enterprises accept this fate. Some enterprises are moving to countries and regions with lower energy costs: American steel giant ArcelorMittal said earlier in September that it would cut the steel production of a German steel plant and another steel plant also located in Germany by half. The company said the decision was based on high gas prices.

In addition, ArcelorMittal recently warned that it is expected that the steel production in the fourth quarter of this year will decrease by another 1.5 million tons, again due to high gas prices and declining demand.

At the same time, ArcelorMittal announced earlier this year that it planned to expand its business in Texas and described the state as a "region providing highly competitive energy, which will eventually provide competitive hydrogen". According to Huacheng Import and Export Data Observation, ArcelorMittal is just one of the European enterprises that are beginning to see benefits from their development in the United States.

Ubert quoted industry executives as saying that this is not a difficult decision to make. Fundamentally, according to the report, this is a simple dilemma, whether to retreat in the face of excessive energy bills or move to an environment where energy is cheaper and can provide new incentives for certain industries.

Chemical industry, battery, green energy - these fields will benefit greatly from the Inflation Reduction Act passed by the United States in August. No wonder, enterprises active in these fields think that it is a good idea to move or expand in the United States.

At the same time, in Europe, more and more enterprises are turning to survival mode. This is because, for many of them, it is time to renew power supply contracts with public utility companies. Due to energy inflation, this price will be much higher than the contract price of this year. In France and Germany, the contract price of the previous year has exceeded 1000 dollars.

According to the Huacheng Import and Export Data Observation Report, Liz Alderman of the New York Times wrote in a recent report that because of the higher demand for energy, energy intensive enterprises such as manufacturing and fertilizer production are particularly vulnerable to the impact of high energy costs. She cited the example of Arc International, a professional manufacturer of glass, which is also closing its production sector to cope with higher energy costs.

The European Commission has promised to help by limiting the income of power generation enterprises that use non natural gas as the main energy source, as well as taxing the "excess" profits of oil, natural gas and coal companies. According to the European Commission, it is wrong to grab cash in the current situation, although the profits themselves are good.

The European Commission plans to raise 140 billion euros for distribution to families and businesses in distress. However, critics point out that this is not enough to save European energy intensive enterprises from bankruptcy. The industry association Euroaluminum even said that high energy costs may lead to the collapse of Euroaluminum.

Huacheng Import and Export Data Observation reported that the CEO of RHI Magneta, a refractory manufacturer, said: "I think we will barely survive two winters. However, if the natural gas price does not fall, enterprises will start to look for other places."

It seems that packing up and going to countries and regions with lower energy costs is another unexpected consequence of the policies favored by European governments (especially the energy sector). This is another risk that the EU, as a competitive industrialized country, can survive in the future. This risk has brought another problem that needs to be solved in the short term to EU governments and Brussels regulatory agencies, Huacheng Import and Export Data Observation reported.