High electricity prices forced German GMH Group to halt production

At 8:00 a.m. on January 20, 2025, the German steel company GMH Group announced that it would stop producing green steel at one of its electric arc furnace shops. The reason for this step was a sharp jump in electricity prices to €400/MWh, which made further operation of the company economically unprofitable. This was stated by Anna-Maria Grossmann, a company spokesperson.

“This is an emergency situation for Germany, a country of engineers and innovators. Monday is usually one of the most productive days for the industry, but the current conditions have forced GMH Group to cease operations,” commented Anna-Maria Grossmann.

The company points to systemic problems in the country’s energy policy. The abandonment of nuclear power was not accompanied by the construction of new gas-fired power plants, and proposals to stabilize electricity prices were never implemented. In addition, network tariffs for enterprises have doubled in recent years, which further increases costs.

For comparison, in 2019, spot electricity prices in Germany did not exceed €130/MWh. Now, the new price levels are forcing not only GMH Group but also other industrial companies to reconsider their operations.

“Billions of euros in lost revenue, two years without economic growth, loss of jobs and competitiveness are the consequences of our energy policy,” Grossmann summarized.

GMH Group calls on the government to urgently intervene to stabilize electricity prices and reduce network tariffs. The company also proposes to recognize natural gas as a transitional technology to ensure a stable energy supply.

The European People’s Party has proposed to change the approach to the EU’s climate and economic policies to support the bloc’s declining economy. The political group proposes to cancel the renewable energy targets and simplify the reporting of companies.

As GMK Center reported earlier, in January-November 2024, Germany increased steel production by 5.3% y/y – to 34.49 million tons, including 3% y/y in converters – to 24.19 million tons and 10.9% y/y in EDI – to 10.3 million tons.