October 06
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Electricity prices in Europe continued their steady rise on Wednesday, which further increased the pressure on the continent's industry, reported.

Day-ahead electricity prices rose to €563.76/MWh in Germany and €553.62/MWh in France, according to exchange operator Nord Pool, as natural gas shortages and low river levels continue to hamper producers.

Futures contracts for next year do not indicate an easing of pressure anytime soon. Baseline capacity for Germany in 2023 rose to 513.5 EUR/MWh on the European Energy Exchange and remained at 676 EUR/MWh for France, both multiples of pre-war levels in Ukraine.

The energy crisis is having an increasingly noticeable impact on industrial production in the region.

Earlier Wednesday, Norwegian energy and metals group Norsk Hydro (OL:NHY) said it would suspend primary aluminum smelting at its Slovalco plant in Slovakia due to high energy costs. Processing operations will continue, but the plant, which was already operating at only 60% of its annual capacity of 175,000 tons, will only reopen if market and framework conditions allow.

The news comes a day after Belgian company Nyrstar said it would include its Budel zinc plant in the Netherlands in a care and maintenance program from September, citing similar cost pressures.

Electricity prices in Europe fell briefly on Tuesday after The Wall Street Journal reported that Berlin plans to allow Germany's last three nuclear power plants to continue operating after scheduled shutdowns at the end of the year. However, they quickly recovered after the Ministry of Economy denied the publication.

More bad news came when Uniper (ETR:UN01), a German gas importer and distributor, reported a €12.4bn loss in the first half of the year as the company was forced to buy gas on the spot market at prices above average.

These developments have been overshadowed by more promising news about deliveries from Germany this week. Economics Minister Robert Habeck said on Tuesday that two floating regasification units destined for the North Sea ports of Brunsbüttel and Wilhelmshaven will be operational by early 2023, significantly boosting Germany's ability to receive liquefied natural gas. This will give Europe's largest economy a greater margin of safety if, as many expect, Russia completely cuts off gas supplies in the winter.

Germany has also made more than expected progress in filling its gas storage facilities ahead of the winter heating season. The Bundesnetzagentur, which oversees the country's energy networks, said Germany's gas storage facilities were 77.3% full as of last week, in line with their multi-year average, despite Russia currently sending only 20% of its contracted volumes.

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