German rerollers fear bankruptcy due to energy costs

More than half of Germany's sheet steel producers could lose existing electricity contracts by 2023

German sheet steel producers fear bankruptcy due to high energy costs. Eurometal reports about it.

According to a survey by the Sheet Metal Manufacturers Association (IBU), more than half of local producers may have their electricity contracts with existing suppliers expire as early as 2023.

“Many of our member companies are not receiving any offers at all, not even regular customers of the utilities, and not even at sky-high prices,” commented Christian Vietmeyer, executive director of the Steel Manufacturers’ Federation (WSM).

Two-thirds of companies surveyed by the IBU believe their existence is threatened by rising energy prices and other costs. Thus, the survey of steelmakers is a call to politicians to understand the urgency of the situation.

“We need a secure energy supply at acceptable prices, and policymakers must now get specific with that very quickly. Record prices and insecurity could drive more and more companies to less expensive foreign countries, and accelerate a deindustrialisation in Germany,” said Bernhard Jacobs , executive director of the IBU.

As GMK Center reported earlier, chancellor of Germany Olaf Scholz announced a €200 billion ($194 billion) «defense shield» to protect businesses and households from increasing energy prices.

According to plans, by the spring of 2024, the government will introduce a mechanism for an emergency reduction in gas prices. The previously planned gas fee will also be canceled to help companies in the face of high prices in the spot market. Gas sales tax will fall from 19% to 7%.