Gas prices: Sheffield steel and glass companies warn of price rises and shutdowns

A Sheffield foundry is facing a four-fold increase in energy prices amid warnings it will have to pass it on to customers.

Wednesday, 13th October 2021, 2:06 pm

Brass Founders could pay an extra £200,000-a-year for gas and electricity after bills soared this year.

Boss Paul Cheetham says margins are so tight they would be forced to hike product prices up to 16 per cent – on top of a 10 per cent ‘general increase’ due to inflation, National Insurance and other factors.

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Brass Founders, Carlisle Street, Sheffield. Picture: Chris Etchells

He added: “There’s no way we can absorb it, we run on very tight margins and it will be passed on to the customer.

“The government needs a recovery plan if they want a manufacturing base in the North. They need to subsidise business or put tariffs on imports.”

He spoke out after wholesale gas prices increased 400 per cent this year, sparking protests from ‘energy intensive industries’ and warnings of potential shutdowns and job losses in sectors including steel, glass, ceramics and paper.

Mr Cheetham said they fixed their energy costs annually in February and he feared what 2022 could bring.

Brass Founders, Carlisle Street, Sheffield. Picture: Chris Etchells

State-backed loans

On Monday, business Secretary Kwasi Kwarteng submitted a formal proposal asking the Treasury to launch state-backed loans.

Mr Cheetham said he would take one, but it would only postpone their difficulties.

Elsewhere in Sheffield, a source close to Liberty Steel, which has huge plants in Stocksbridge and Rotherham, said energy costs were ‘definitely an issue that will have to be addressed’.

The firm is set to re-start two giant electric arc furnaces in Rotherham following a £50m cash injection.

Dave Dalton, chief executive of the British Glass Manufacturers Association, based in Chapeltown, said some companies were days away from halting production.

He added: “Some businesses have seen their energy bills spiral up to eight-fold meaning an extra burden of millions of pounds a month which simply cannot continue.

“A glass furnace needs to be running continuously due to the high temperatures needed to melt the raw materials and the inability to pause this process without significant cost and damage to the furnace.”

Glassworks

Glassworks in South Yorkshire include Beatson Clark in Rotherham and Ardagh Glass in Barnsley.

Last month, Forgemasters said it hoped to avoid ‘disruption’ from the gas crisis. The Brightside steelmaker said ‘volatile’ energy prices would have a ‘modest but manageable’ effect.

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Thank you. Nancy Fielder, editor.