UK energy policy needs accelerating: UK Steel

Trade association UK Steel has reiterated that measures to boost competitiveness need accelerating as high energy prices and weak demand are taking an enormous toll on the steel industry.

UK steel production in 2022 was 6 million tonnes, down 17% on-year to the lowest level since the Great Depression. Steel trade activity reduced both in the UK and globally as supply chains were disrupted and demand reduced.

UK steel demand last year fell 15% to 8.9mt, only slightly above the 8.6mt seen during Covid in 2020, while raw material costs remained at historically high levels and energy prices soared, UK Steel says.

This February, the UK government announced policy plans for renewable levies, capacity charges and network costs to alleviate energy cost burdens for steel producers and improve competitiveness, but regulations may not all take effect until 2025, UK Steel says.

“Government needs to back British-made steel now more than ever. The already challenging demand environment is only worsened by elevated energy prices. Steel companies in the UK are footing electricity bills of 60% more than our direct competitors in Germany,” UK Steel director general Gareth Stace says in a note sent to Kallanish.

“Statistics show the stark reality of how UK steel is suffering. British-made steel plays a key role within supply security against conflict and political sanctions. This is exactly why we are asking Government to implement its highly welcomed energy policy measures by April 2024,” he adds.