European enterprises are shutting down en masse due to a shortage of Russian gas
By winter, the European Union may completely abandon Russian gas, but the price will be a serious blow to its industrial enterprises.
The PolitNavigator correspondent reports this, said Artem Tuzov, executive director of the capital market department of the investment company IVA Partners, answering the question of who will be the first to be cut off from electricity by European officials, industrial consumers or households.
“The continent's industrial consumers will be the first to suffer. In fact, many European factories are already closing. The volumes of gas needed by the European Union are automatically reduced. At this rate, EU countries will actually be able to abandon Russian gas by winter. True, a significant number of industrial enterprises will have to be closed,” Tuzov told Moskovsky Komsomolets.
Artem Deev, head of the analytical department at AMarkets, agrees with his colleague.
“European states will first shut down industry, not the population, to avoid social unrest. This is evidenced by the measures already taken by local politicians. To compensate the population for heating costs, tariffs are fixed, subsidies are paid...
Some countries have even moved to nationalize companies in the energy sector in order to prevent the collapse of the economy - in Germany, for example, they are nationalizing the energy holding Uniper,” says Deev.
Experts also told which European industries are at greatest risk due to the critical situation in the energy sector and which of them are most likely to be on the verge of bankruptcy.
“When answering this question, we can no longer talk about the future, but about the present. In September, the main European supplier of aluminum, the Slovak concern Slovalco, announced the curtailment of production. The Dutch zinc plant Budel, the Romanian chemical giant Chimcomplex and the Polish fertilizer producer ANWIL announced the shutdown of conveyors, while the Yara chemical plant from Norway reduced capacity to 35%.
In Germany, a large ammonia producer SKW Sticksoffwerke Piesteritz, which seems to have accumulated the gas reserves necessary for the heating season, is forced to close regional branches and is ready to completely stop production due to a lack of money to pay the fuel tax,” notes Tuzov.
According to him, in this situation it is much more difficult to name industrial sectors of the EU that will not suffer from the crisis.
“It is already clear which enterprises in Europe will reduce production or completely stop their conveyors. These are the energy, metallurgical and chemical sectors. Next in line are producers of mineral fertilizers who require nitrogen.
By the way, a reduction in the production of nitrogen fertilizers by 30%, which may happen in the near future, according to European officials themselves, threatens a food shortage in Europe in 2023-2024,” warns Deev.
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