FerroAtlantica, the Spanish subsidiary of Ferroglobe, has announced the suspension of the last two furnaces in operation at its ferromanganese and silicomanganese plant in Boo.

Production cuts due to soaring electricity prices have forced FerroAtlantica to temporarily idle the furnaces at all its Spain plants, Sabó in Galicia, Boo in Cantabria, and Monzón in Aragón. This week also saw AcelorMittel idle its blast furnace at its plant near Gijon in northern Spain.  These cuts should put downward pressure on European ferroalloy output, although there are also expectation of weaker local demand in Q4.

While all of Europe is facing an energy crisis in 2022, Spain has been experiencing issues since November 2021.  Spain depends significantly on LNG deliveries by sea and its pipeline link to Algeria. However, Algeria cut natural gas supply through one of the two pipelines linking the two countries, linked to diplomatic tensions over Western Sahara.  Spain's gas imports jumped 27% y-on-y in July as shipments of LNG, mainly from the USA and Russia, soared.

Spain has called for a more ‘balanced’ and stable energy mix, whereby energy sources such as nuclear, natural gas and renewable sources all play a role in transitioning to a carbon-neutral energy future. The current Spanish framework for energy and climate is based on the 2050 objectives of national climate neutrality, 100% renewable energy in the electricity mix and 97% renewable energy in the total energy mix. This is seen as an opportunity to stimulate the economy; create jobs; modernise industry; enhance competitiveness; support vulnerable groups; improve energy security; and support research, development and innovation.

In the near term, Spain is reportedly looking to export excess energy produced through wind farms in Portugal and solar farms in Spain to assist in the short-term energy deficits and has re-initiated discussions with France to allow the continuation of the trans-Pyrenees pipeline project.