European industry is showing the first signs of shutting down as Russia’s invasion of Ukraine boosts energy costs for steelworks, fertiliser plants, and paper mills to unsustainable levels.

Norwegian fertiliser maker Yara International ASA said it would temporarily cut the output of ammonia and urea at its European facilities to less than half of their capacity because of surging gas prices.

Hungarian fertiliser producer Nitrogenmuvex is also temporarily halting production, while Borealis AG is curbing output.

Natural gas is used as a feedstock for nitrogen fertilisers, usually accounting for around 80% of a manufacturer’s costs.

Soaring gas prices are hitting other energy-intensive industries, with paper makers Norske Skog ASA and Pro-Gest SpA halting mills in Austria and Italy this week.

Pro-Gest said that the selling price of a tonne of paper was lower than the cost of the energy required to make it.

Steelmakers including Acerinox SA suspended operations at several facilities across Spain after energy prices more than doubled in the past two weeks.

Despite benchmark construction steel prices surging to record levels in Europe this week, many mills using electric-arc furnaces are still likely unprofitable.

Elsewhere in Europe, Liberty Steel’s mill at Rotherham in the UK has been forced to stop production due to soaring power costs, according to a person familiar with the matter. Liberty declined to comment.

Our next investment should focus on these 3 energy-intensive industries and agriculture stocks. Russia and Belarus are the major exporters of fertiliser. Soon, it's not a matter of soaring fertiliser prices but unable to secure sufficient fertilisers for the crops in nations that are deemed unfriendly by Russia. Luckily Malaysia is not on the list