across Europe, these industries which are at risk of relocation

by time news

Svein Tore Holsether compares his sector to the European textile industry of the 1990s: on the verge of major relocation. Since the end of August, the boss of Yara, a large Norwegian multinational that manufactures fertilizers, has reduced production by two thirds at its many European factories, including three in France. The surge in the price of gas, which is its raw material (it is transformed with nitrogen from the air to produce fertilizer and a series of by-products), made them no longer profitable. “If you take urea [un des produits issus de ses usines] for example, when we decided to close, it cost us 2,000 dollars (2 040 euros) per tonne to produce, and it was selling for $800. In the United States, the same ton costs 200 dollars to produce, and in Russia 100 dollars. »

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Impossible in these conditions to stand up to the competition. And if its manufacturing sites, which employ 7,000 people in Europe, are not completely closed, it is mainly to produce AdBlue, an essential product for diesel trucks, the price of which has risen sharply and which remains profitable. .

A month after this virtual closure of its activities in Europe, Mr. Holsether fears that the damage may be irreversible. “We risk seeing our industry erased from the map in Europe. You know, we’re not like restaurants that you can temporarily close to fight a virus and find their customers afterwards. The danger is that it becomes permanent. » He recalls that his factories supply “quality blue-collar jobs”which is becoming rare in Europe.

Everywhere across the Old Continent, industry is bearing the full brunt of a historic gas shock. Natural gas, which serves as a source of energy, but also often as a raw material, has gone from 30 euros per megawatt hour a year ago, to 200 euros today, with a peak of 350 euros in August. Almost overnight, many factories, very energy-intensive and often already unprofitable, found themselves in deficit. The shock is concentrated in Europe, since gas is transported poorly and prices are different by region. In the United States or in Asia, its cost has increased in a much more limited way.

Trade balance

Robin Brooks, a German who is chief economist of the Institute of International Finance (IIF), a financial association based in the United States, believes that it is “of the strongest competitiveness shock for Europe since the 1980s”. Suddenly, the euro zone’s trade balance, which had been structurally positive for a decade, plummeted. From January to July 2021, it was (for goods) 121 billion euros in the euro zone; from January to July this year, it rose to −177 billion euros. “We always think of Europe as a region with a trade surplus. In two months, it disappeared. It’s shocking “continue M. Brooks.

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