Spain’s steel plants close over soaring energy prices

Acerinox became the latest steel producer to halt operations in Spain on Thursday due to surging energy prices caused by Russia's war in Ukraine.

Spain's steel plants close over soaring energy prices
Several steel plants in Spain have decided to halt production for several days. Madrid has for months urged its European partners to change the mechanism which couples electricity prices to the gas market. (Photo by Ina FASSBENDER / AFP)

A union source at the Spanish stainless steel maker told AFP the firm had halted production at its plant in Cadiz in the southern Andalusia region due to soaring electricity prices.

Electricity prices have hit record highs in recent days on the Spanish wholesale market, forcing Acerinox to push through plans to furlough all of its 1,800 staff at the Cádiz plant, he said.

The unions, he said, were currently in talks with management to “negotiate the terms” of the so-called ERTE furlough scheme.

The move came after a year in which the steelmaker’s net profits soared to a record €572 million on surging global demand.

Earlier this week two ArcelorMittal factories, both in the northern Basque Country, halted production over surging energy prices, a spokesman for the global steel giant told AFP.

One plant located in Olaberria, with a 400-strong workforce, shut down for 15 hours on Tuesday due to “high electricity prices” which are weighing on production costs.

It resumed operations on Wednesday “but only intermittently” during off-peak hours when electricity prices were lower, he said.

The group decided not to resume activity at a second factory with a 200-strong workforce in Sestao where operations had been due to resume Sunday after being idle for four days.

A truck is seen at ArcelorMittal steel company in the Spanish Basque city of Olaberria on March 10th, 2022. Several steel plants have halted operations in Spain due to surging energy prices caused by Russia’s war in Ukraine. (Photo by ANDER GILLENEA / AFP)

“We’re following the price closely every day but we still don’t know how long this situation of exorbitant prices is going to last,” he said.

According to another industry source, “other steel plants” have also decided to halt production for several days, such as the Spanish group Megasa.

Madrid has for months urged its European partners to change the mechanism which couples electricity prices to the gas market but its pleas have so far fallen on deaf ears, despite support from Paris.

But since Russia’s invasion of Ukraine, positions have shifted with the question of electricity prices to be discussed at a two-day EU summit at Versailles near Paris which began on Thursday.

In a statement, Fernando Soto, head of AEGE, which represents energy-intensive companies, urged the Spanish government to introduce “emergency measures”.

“Energy-intensive industries in Spain are suffering from the rising costs of electricity supplies” which have reached levels “never before seen in our market,” he said on Wednesday, warning the sector’s activity was “at serious risk”.


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One in three Spaniards can’t afford to go on holiday this summer: study

One third of Spaniards can't afford to pay for a holiday this summer and almost half the population is having trouble making ends meet, according to new data from Spain's national stats agency.

One in three Spaniards can't afford to go on holiday this summer: study

Data from Spain’s national statistics body, the Instituto Nacional de Estadística (INE), has revealed that one in three Spaniards cannot afford to take a week’s holiday.

The 2021 Living Conditions Survey, published this week, also concluded that over one in four Spaniards (27.8 percent) were at risk of poverty or social exclusion, a figure which represents an increase of 1.6 percent on the 2019 study.

The INE considers someone at risk of poverty if their income level is below the the national average; that they are suffering “severe material and social deprivation”; or that their household is classified as “low intensity in employment.”

There are 13.2 million people who meet at least one of these criteria in Spain.

The study, which the INE publishes once a year, is the most detailed reference for measuring poverty at the national level, and the numbers also reveal that there are 10.3 million people in Spain with incomes below the poverty line.

In 2020, that threshold was €9,535 per annum for a single-person household and €20,024 for a household of two adults and two children.

Furthermore, there are another 4 million Spaniards facing “severe material deprivation,” which is defined as people who cannot afford expenses such as going on holiday for at least one week a year (32.7 percent of Spaniards), eating meat or fish every two days (4.7 percent), having the financial capability to deal with unforeseen events (33.4 percent) or maintaining a comfortable temperature at home (14.3 percent), something particularly important during the summer months in Spain but made much more difficult by increasing electricity prices.

READ ALSO: How much does it cost to have air conditioning at home in Spain?

North-South divide

Many countries have a famous North-South divide – Italy, England, and the United States, to name just three. Spain can be included on this list, and this is especially true when delving into the INE data.

According to the study, economically speaking Spain is increasingly divided into horizontal halves: in southern Spain poverty levels even double those in the north.

A third of people living in Andalusia and Extremadura are at risk of poverty, for example.

In the Canaries, Murcia, Castilla-La Mancha, and Valencia, the figure is one in four.

Contrast that, however, with the data from northern Spain: only one in ten people in Navarra and Basque Country are at risk of poverty; in Madrid (admittedly central Spain but it is the capital) and Catalonia, the figure is slightly higher but still only around 15 percent.


The economic hardship comes amid not only Spain’s recovery from the pandemic, but also the double shock of skyrocketing inflation, which reached a 37 year high this week, and crippling energy bills caused by knock-on effects from war in Ukraine.

A loss of earnings during Covid-19 lockdown, combined with Spaniards feeling the pinch of inflation in their shopping baskets and rapidly increasing energy bills, means that more Spaniards are being pushed into poverty and the gap between the rich and poor in Spanish society is widening.