Siderurgia Nacional, a key player in Portugal’s steel sector and part of the Megasa Group, has been forced to temporarily halt operations at its Seixal and Maia plants due to escalating energy prices. These plants, which are among the largest in Portugal, are critical to the country’s steel production and industrial output. The stoppage, initially set to last until Friday, may be extended depending on the ongoing volatility in electricity prices. SN has made it clear that the surging costs of electricity have made it economically unfeasible to maintain regular production schedules, as the plants can no longer operate at a profit under current energy cost conditions.
The decision to suspend operations is a direct response to the soaring electricity prices that have crippled the plant’s ability to function effectively. Megasa, the parent company of SN, explained that the plants had previously only operated when electricity costs per megawatt-hour were economically viable. However, the current market conditions have pushed energy costs beyond levels that can be absorbed by the company without significant financial losses. As one of the largest energy-intensive industries in Portugal, the steel sector is particularly vulnerable to fluctuations in energy prices, and the rapid rise in electricity costs has left SN with no choice but to halt production temporarily.
SN’s operations are vital not only to the company itself but also to the wider Portuguese economy. The steelmaker directly employs 700 people, while an additional 3,500 jobs are indirectly supported by the company’s activities. SN also contributes significantly to Portugal’s export economy, generating approximately €900 million ($947.9 million) in annual exports. The temporary closure of these plants is not just a loss for the company, but it also has far-reaching implications for the local economy and workforce. With the steel industry already facing competitive pressures, especially from countries with more favorable energy pricing, the current energy crisis in Portugal threatens the stability of the entire sector.
In response to the crisis, Megasa has made efforts to invest in renewable energy sources to enhance the sustainability and cost competitiveness of its operations. One such project includes the development of a photovoltaic park at the Maia plant, which aims to reduce the company’s reliance on grid electricity by generating its own renewable energy. However, similar projects at the Seixal plant have been delayed due to bureaucratic hurdles and the need for approvals from both local and national authorities. Megasa has stressed that these renewable energy projects are crucial for the long-term viability of SN and for reducing the company’s carbon footprint. They are also essential for the local and national economy, helping to ensure that Portugal’s steel industry can remain competitive in the face of rising energy costs.
The energy crisis has also highlighted the broader issue of energy regulation in Portugal. While the Portuguese government passed legislation in 2022 aimed at supporting energy-intensive industries, the measure is still waiting for approval from the European Commission. Megasa has called for clearer, more effective national and European energy regulations that would provide industries like steel manufacturing with tailored energy cost structures. These structures would ensure that energy-intensive sectors are not at a competitive disadvantage compared to their counterparts in other European countries, where energy prices for industrial users are often subsidized or adjusted to help maintain competitiveness.
Without swift action to address these challenges, Megasa warns that the steel industry in Portugal faces a precarious future. The rising energy costs, coupled with delays in renewable energy projects and the lack of supportive regulations, could undermine the viability of the entire sector. SN’s temporary shutdown is just the latest sign that the energy crisis is affecting not only the steel sector but also other industries that rely heavily on stable and affordable energy sources. As one of the largest employers and exporters in Portugal, any sustained disruption to SN’s operations could have serious consequences for the country’s economy, particularly in the regions where the Seixal and Maia plants are located.
The situation facing Siderurgia Nacional is a stark reminder of the challenges faced by energy-intensive industries across Europe. While the move towards renewable energy is necessary for long-term sustainability, the transition must be managed carefully to ensure that it does not undermine the competitiveness of industries that rely on affordable energy. As Portugal’s largest steel producer grapples with soaring energy prices, the industry is calling for urgent reforms to ensure its future survival and growth. If left unaddressed, these issues could have lasting repercussions for both the steel sector and the wider economy.
