Podcast: Can British Steel succeed in tough UK market? 

UK Steel director general Gareth Stace has told MEPS’s Speaking of Steel podcast that government must create a “competitive business environment” for domestic steelmakers after it stepped in to save British Steel’s Scunthorpe operations.

Stace was interviewed by MEPS managing editor Tom Sharpe as part of the latest episode, entitled ‘Can British Steel succeed in tough UK market?’. MEPS steel market analysts Jon Carruthers-Green and Chris Jackson also share their insight in the podcast, which reflects on the UK government’s move to assume control of the steelmaker. 

Jackson described the steelworks in Scunthorpe as a “strategic asset” for the UK. He said that the facility, which specialises in long products, including rail, plays a crucial role in supplying material for national infrastructure projects. 

Carruthers-Green highlighted the expense of keeping British Steel Scunthorpe operations running, however. After announcing its plan to close the Scunthorpe site’s two blast furnaces, the company’s owner, China’s Jingye Group, had earlier stated that the site was suffering financial losses of £700,000 per day. The UK government is now in control of the site while searching for a new owner to secure its long-term viability. 

“There are going to be some serious questions for the next few years,” said Carruthers-Green. “We saw a statement in parliament, by the business secretary, suggesting that they had spent GBP94 million already, in about three weeks, on keeping things running.  

“Obviously, they had to buy a lot of raw materials with that but, still, that gives you an idea of the amount of money that needs to be spent to keep the site running.” 

‘Unsustainable and unacceptable’ 

In his interview for the Speaking of Steel podcast, Stace said that the UK government would be searching for an investor to buy British Steel, but said: “What would they be buying? They would be buying into a sector in the UK that still works with an uncompetitive environment. For example, energy costs here are still 50% more than steel companies pay in France or in Germany.” 

Stace added: “What we have seen in the past two years is imports surging from something like 50% of UK steel demand to a now alarming 65%. That is unsustainable and unacceptable. So, a forthcoming steel strategy, which I hope will be published by the UK government in the next few months, needs to deliver that competitive business environment so that we can compete and start taking back market share that we have lost to those imports.” 

MEPS’s ‘Can British Steel succeed in tough UK market?’ episode of the Speaking of Steel podcast is available via all major podcast platforms. Click on the links below to watch or listen:   

YouTube 

Spotify 

Apple Podcasts 

• Regular insight from the UK steel market is published in MEPS International’s European Steel Review. The monthly publication features steel prices, price indices, market commentaries and six-month price forecasts for the UK, as well as Belgium, France, Germany, Italy and Spain. Contact MEPS for details of how to subscribe.