UNESID warns of €60 million monthly cost surge for Spanish steel industry

Spain’s steel industry is facing rapidly rising costs due to escalating international tensions, with additional expenses estimated at around €60 million per month, according to industry association UNESID.

During a meeting with Spain’s Minister of Economy, Trade and Business, Carlos Cuerpo, and Minister of Industry and Tourism, Jordi Hereu, UNESID representatives highlighted the growing pressure on the sector caused by sharply higher energy and logistics costs.

According to information collected from member companies, the rising prices of natural gas and electricity are having an immediate impact on the competitiveness of Spain’s energy-intensive steel industry. If current price levels persist, the sector could face additional costs of around €60 million per month.

Energy costs are only part of the challenge. Steelmakers are also facing higher transport costs, with road freight prices increasing by up to 2.5% per week due to rising diesel prices. Maritime freight rates have already increased by 10–20%, while raw materials and industrial inputs are also becoming more expensive.

Companies are also reporting growing disruptions in international supply chains. These include the cancellation or rising cost of maritime insurance in conflict zones, rerouting of shipments to safer ports and delays in deliveries.

Carola Hermoso, Director General of UNESID, said the rapid increase in costs is placing significant pressure on the sector. “Steel companies are facing a sharp rise in costs in a very short period of time, creating enormous pressure on the competitiveness of an industry that already operates in highly demanding global markets,” she said.

The current situation is also creating uncertainty for customers and steel producers alike. Some steel-consuming sectors were already experiencing weak demand due to the broader economic environment. At the same time, some buyers are delaying purchases due to uncertainty, while others are bringing forward orders in anticipation of further price increases.

Several companies estimate that variable production costs have already increased by around 20–25%. If international tensions persist, this could lead to weaker demand and delays in investment.

To limit the impact of rising energy prices, UNESID is calling for urgent policy measures. The association has asked the government to reactivate the “Iberian exception” mechanism that decouples gas prices from electricity prices and to temporarily suspend the 7% tax on electricity generation (IVPEE).

The steel industry also calls for stronger compensation for indirect CO₂ costs, further reductions in electricity grid charges for energy-intensive industries and faster implementation of EU trade defence measures.

UNESID represents Spain’s steel producers and primary steel processors. The sector includes 46 companies and supports around 60,000 jobs directly and indirectly. Spain produces approximately 11.4 million tonnes of steel annually, exporting around 7.6 million tonnes.

Source: UNESID, Photo: Fotolia