Some of Europe’s biggest energy users are curbing production as they warned soaring power and gas prices could lead to higher manufacturing costs and hit competitiveness.

Dunkirk’s Alvance, Europe’s largest producer of aluminum, has reduced output by close to 4 percent since early December, as outages at several nuclear power plants sparked higher electricity prices in France.

Nyrstar, the zinc producer owned by commodity trader Trafigura, has said it will mothball a 150,000-tonne-a-year smelter in Auby, northern France, after Christmas due to record power prices.

The company, which has already curtailed production across three sites in France, Belgium and the Netherlands because of surging energy costs, said it expected the higher prices to continue.

“Electricity is 35 percent of our fixed costs, which is huge,” Xavier Constant, the director of the smelter, told France Info radio this week. The closure will last at least two months.

European gas prices jumped to new records this week as reduced Russian imports increased winter demand.

Gas for delivery in Europe next month, which was already trading at record levels, jumped more than 20 percent on Tuesday to close at €181 per megawatt-hour.

In the UK, prices climbed 20 percent on Tuesday to a record 450 pence per therm, although they had fallen back to trade at 348p on Thursday.

Some British steelmakers are pausing production when electricity prices rise, according to trade body UK Steel.

Richard Leese, chair of the Energy Intensive Users Group, warned that concerns were rife that “as inflation starts to bite, demand might subside and when it does, companies will still be left with very high operational costs”.

Bankers said their phones had been “ringing hot” from commodity traders seeking additional credit lines to cover margin calls — demands for extra cash to cover trading positions in natural gas and LNG.

Big commodity traders use derivatives to hedge contracts against price swings and lock-in margins. This typically involves selling futures contracts linked to ‘ITF, Europe’s wholesale gas price.