Spanish Industry Starts Shutting Down Its Factories Over Energy Prices, Demanding Government Action Now

Arcelor Mittal

Business associations representing industry operating in Spain have joined forces for the first time to call on the government to intervene urgently to change the electricity market rules and end the sharp rise in prices due to the conflict in Ukraine. The associations are calling on the government to adopt an urgent decision in the Council of Ministers to reform the marginal electricity market for the duration of the conflict, decoupling the price of fossil fuels from the market price of electricity. This measure would prevent natural gas from pushing up the price of the electricity pool. Industry considers this intervention is the only viable and impactful way to maintain industrial activity and employment.

The news comes on the same day as industrial company ARCELORMITTAL (MTS) has announced its decision to shut down the Gijón steelworks between the 24th and 28th of this month, inclusive, due to the high price of energy. And when the ABC newspaper reports that Cementos Portland, a subsidiary of FCC, decided yesterday that, due to high energy prices, it will stop at midnight on Wednesday all its furnaces in the six factories it has in Spain. These are located in the communities of Catalonia, Navarre, Cantabria, Castilla-Leon, Madrid and Andalusia. This measure will be maintained until electricity prices return to 200 euros or less per megawatt (MW), which makes its activity profitable.

The cost of energy is unaffordable for Cementos Portland. It understands that continuing with its kilns’ activity would mean continuing to lose money. The measure will affect 800 employees in its factories (110 of them in Seville). However, for the time being, the company has decided that it will not implement temporary layoffs. The Cementos Portland factories are located in Alcalá de Guadaíra (Seville), Mataporquera (Valdeolea), Ontoria (Palencia), Santa Margarita and Monjós (Barcelona), Olazagutía (Pamplona) and Morata de Tajuña (Madrid).

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