Dividends and Mills shut down as Italy’s gas dependent economy hit hard by Russian sanctions, soaring prices

One can think of a country’s electric planning commissions, everyone in an urban area needs electricity to function, we need to turn on the lights. The electricity companies started with tapping the water resources and dams can last for hundreds of years; then coal was used, however the reality is the exhausts are not good for the environment, (read a Dickens novel – the weather was always foggy but reality it was both fog and coal dust or look at the weather in Beijing – the city is in a bowl similar to LA and sometimes the coal is in the air till the wind blows it out). then companies move to oil and then gas. Italy did all those moves when natural gas was lower priced, as a result they moved from 27% to 43% dependence on Russian natural gas. It will take 2 years to replace noted Italy’s Energy Transition Energy.

In an article by Colleen Barry of the Associated Press, even before the war Europe’s was facing a serious energy crunch that drove up costs for electricity, food, and supplies for people and businesses.

One example is Vento-based paper and packaging company, Pro-Gest. Gas prices moved from $125 megawatt hour to over $420 a megawatt hour. To remain profitable, they would have to double prices from $947 a ton to $1,670 a ton. Pro-Gest sells recycles paper which supplies 1/3 of all Italy’s packaging needs.

Acciaierie Venete shut down 3 of its steel mills for a few days during March as spiked to 10 times above normal. Francesco Semino an executive with the company which makes high quality steel for automotive and agricultural machinery says never ever has this happened.

Linking to dividend paying stocks, there are always prices that companies can not control, most of us believe that technology and innovation will help make business adapt to the changes. Sometimes elements out a companies control happen and everyone hope it is short time, but changes need to be made and how the company adapts and comes out stronger is why you would want to invest or find alternatives.

There are more questions than answers, till the next time – to raising questions.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s