Rising energy prices: German steel recycling companies under pressure

by David Fleschen

The invasion of Russian troops in Ukraine at the end of February has far-reaching effects on German and European industry - including steel recycling companies. The Federal Association of German Steel Recycling and Waste Management Companies (BDSV) is therefore calling on the Russian troops to leave Ukraine. (BDSV) is therefore calling on politicians to initiate financial relief for affected companies as quickly as possible so that the climate protection targets set out in the EU Green Deal can be achieved.

In addition to the humanitarian crisis caused by the war in Ukraine, the situation is also creating high economic uncertainties, especially in the markets for raw materials and energy. The reason for this is that both Ukraine and Russia are among the world's most important suppliers of raw materials and energy. BDSV Managing Director Thomas Junker comments: "The steel recycling industry is particularly affected by the already extremely high energy costs. Electricity costs are currently highly volatile in response to Russia's attack on Ukraine. While the electricity price (here monthly product Base May 2022) was still around 200 €/MWh (20 ct/kWh) at the beginning of the Ukraine war on 24 February 2022, it made a jump from 395 €/MWh to up to 620 €/MWh from 08 to 09 March 2022, only to slip back down to 440 € /MWh afterwards. These price increases place a heavy burden on our member companies, because: In order to produce and supply valuable raw materials for the steel industry and foundries, steel recycling requires large amounts of energy." Huge price increases are also currently prevailing in the primary energy sector. Natural gas, for example, is about four times as expensive as it was a year ago.

Due to these dramatic developments, the BDSV sees an urgent need for action on the part of politicians. BDSV President Andreas Schwenter emphasises: "Companies from the steel recycling industry make a valuable contribution to the circular economy and thus to the urgently needed decarbonisation of industry. However, they can only fully fulfil this important mission if the energy supply is guaranteed and energy can be purchased at reasonable prices. This requires support from politicians in order to noticeably relieve the burden on companies now and to launch effective instruments to reduce energy prices." From the BDSV's point of view, this is also about securing the existence of a future industry that is becoming increasingly important in times of raw material shortages and global supply bottlenecks.

Source: BDSV, Photo: Fotolia

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