Bridgnorth Aluminium, a Shropshire-based manufacturer supplying rolled aluminium for various industries including automotive and batteries, is facing mounting pressures from surging energy costs as winter approaches. The company’s head of sales, Adrian Musgrave, described the situation as “just worry upon worry,” reflecting widespread concern among European industrial firms grappling with escalating energy bills.
In recent months, natural gas prices have doubled, influenced by renewed tensions between the United States and Iran. This conflict has disrupted global energy supplies, particularly through attacks on shipping in the Gulf and restrictions on transit through the Strait of Hormuz, a critical artery for around 20% of the world’s oil and gas. British wholesale gas prices recently reached 205 pence per therm—the highest since Russia’s 2022 invasion of Ukraine—and have more than doubled since June.
Bridgnorth Aluminium’s monthly combined gas and electricity bill is approximately £1.1 million, accounting for 18% of its total costs, with energy expenses continuing to rise. Although some contracts include clauses enabling the company to pass excess energy costs to clients, Musgrave said customers may resist upon contract renewal. He stressed that the company is not currently considering layoffs or temporary shutdowns but is exploring options such as an extended Christmas closure and advancing planned maintenance to periods of lower production costs.
The UK’s heavy dependence on gas imports—about 70% of its supply—coupled with below-average gas storage levels, intensifies the country’s vulnerability to price fluctuations. Europe as a whole is entering winter with storage at around 67%, well under the seasonal average of 80%, with Germany, which holds Europe’s largest storage capacity, estimated at only 50% full and unlikely to meet its 70% target.
Across Europe, energy-intensive industries are raising alarms about the impact of sustained high energy prices. Alexander Julius, managing partner at Macrometal Handelsgesellschaft and president of trade body Eurometal, warned that uncompetitive energy costs threaten manufacturing viability, potentially driving production to countries like China and India. Eurometal forecasts up to 300,000 manufacturing job losses in Europe by year-end, exacerbated by international competition and rising energy expenses.
Similarly, Axel Eggert, director general of the steel association Eurofer, said ongoing high prices risk causing production cuts to become permanent, with adverse consequences for investment, employment, and the survival of European industrial plants. The German automotive sector has also called for coordinated action between Berlin and Brussels to secure affordable energy and modern infrastructure, noting that elevated electricity costs undermine competitiveness relative to regions such as the United States.
The chemical industry faces particularly acute challenges, as natural gas serves both as fuel and feedstock. Italy’s Federchimica president Francesco Buzzella highlighted energy costs as the primary factor eroding domestic chemical firms’ competitiveness. Energy expenses now represent 18% of the Italian chemical sector’s product value, up from 14% in 2021, with potential to rise further amid elevated oil prices exceeding $100 per barrel. In the UK, the chemical sector has seen a 60% decline in production since 2021, with multiple site closures raising fears of further contraction.
Despite these difficulties, Bridgnorth Aluminium’s Belgian parent company, Voithaoka, remains interested in expanding its UK operations due to the sizable domestic aluminium market. However, Musgrave acknowledged that the current economic environment, shaped by Brexit, the pandemic, geopolitical tensions, and energy uncertainty, is complicating investment decisions and undermining confidence.
Reflecting on more than two decades in the industry, Musgrave noted that stable macroeconomic conditions have become increasingly rare. He expressed concern that continuous upheavals show little sign of abating, placing additional strain on manufacturing firms across the region.