MEPS debate: UK steel industry support ‘long overdue’

The UK government was urged to take action to reduce stainless steelmakers’ energy costs and tighten trade defence measures during a MEPS panel debate at the BSSA’s annual conference.

MEPS research lead Michelle Kirton hosted a presentation and debate on the UK’s stainless steel market at the British Stainless Steel Association event at the Grand Hotel, Birmingham, last week. Kirton was joined on stage by Central Wire Industries commercial director James Wright, Trasteel’s Lauro Castelo and MEPS’s head of price analysis and forecasts, Kaye Ayub.

The presentation provided an overview of the UK’s current stainless steel market and the factors currently influencing prices.

Ayub said that stainless steel transaction prices in the UK had once commanded a premium over those in mainland Europe. However, they have been “pulled down” by subdued demand and low-cost imports from Asia, where production costs are significantly lower.

UK and EU steelmakers strive to remain competitive

Commenting on the current pressure on producers in the UK and EU, Ayub added: “Raw material prices have been going up [in Europe] along with energy prices.

“What we have seen in response to this is some mills purchasing slab from Asia in a bid to bring down their input costs. That’s also bringing down stainless steel scrap costs which is, ultimately, bringing stainless steel prices down. It’s something of a vicious cycle.”

Wright said that the UK’s stainless steel producers required support to remain competitive amid high energy costs. According to the industry association UK Steel, the nation’s producers pay up to 50% more for their electricity than competitors in France and Germany. The industry would also benefit from stronger trade defence regulations, he said.

“Our business has done everything it can to be as streamlined and efficient as we can,” Wright told the conference. “We’ve invested in energy efficient and furnaces that recuperate expended heat, but there’s only so much you can do and then you do start to think, well, we really do need some added protection.”

He added: “Any assistance that could be provided by the UK government would be most welcome, but it does feel a bit long overdue.

“I’ve been in this industry for 35 years and when I started there were probably 10 wire manufacturers, in the UK, like us. Now we are one of the last remaining.

“Imports have devastated the UK steel industry.”

Market downturn reflected in MEPS research

Castelo expressed a desire to see an uptick in market demand, meanwhile. He described the UK and EU markets as “challenging” and said that Trasteel had been forced to diversify its offering to secure orders. The construction sector, in particular, had suffered as a result of the current market downturn.

PMI data presented by Kirton indicated that the UK’s manufacturing and construction sectors had faltered since a short-lived return to growth the summer of 2024. The UK’s manufacturing PMI is now at 46.4, below the eurozone average. A score below 50 indicates a sector in contraction. The UK’s construction PMI is marginally above the eurozone average of 45.6, meanwhile, at 47.9.

Research published in the May edition of MEPS’s Stainless Steel Review described how demand remains weak across Europe. It stated: “Northern European stainless coil and sheet prices fell for a third consecutive month in May as the mood in the market grew more pessimistic”, adding: “Producers in the region are struggling to secure orders, and buyers have been able to negotiate further discounts for July-August deliveries.”