The UK-based trade association UK Steel has stated that high energy prices and weak demand are weighing on the country’s steel production, and so the government should accelerate the efforts to boost the steel sector’s competitiveness.
In February this year, 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 the association stated that the regulations may not all take effect until 2025.
“The 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 percent more than our direct competitors in Germany. We are asking the government to implement its highly welcomed energy policy measures by April 2024,” Gareth Stace, director general of UK Steel, said.
According to the official statistics, the UK’s steel production in 2022 decreased to its lowest level since the Great Depression, falling by 17 percent year on year to six million mt. In addition, steel trade activity was reduced both in the UK and globally as supply chains were disrupted and demand decreased. Last year, the country’s steel demand fell by 15 percent year on year to 8.9 million mt, only slightly higher than 8.6 million mt in 2020 during the pandemic.