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UK steel sector performance remains subdued

May 9, 2019

At the same time as UK Steel issued its wish list for the UK steel sector to the national government, it also published 2018 performance data for the sector. Especially in view of recent events involving British Steel, it makes fairly uncomfortable reading for the domestic steelmaking sector.

UK crude steel production last peaked in 1997, the same year as New Labour won the election, and despite a couple of recoveries has been on a declining trend ever since. Output in 2018 at 7.3 million tonnes was the lowest within living memory. This included 5.7mt of BOS steel from the UK’S last two integrated plants at Port Talbot and Scunthorpe.

Although no breakdown by plant is given, the troubled British steel facility in Scunthorpe produces well over 1 million tonnes/year, so its failure would once again decimate UK crude steel output.

Imported steel still looms large in the UK economy and supplied 60.4% of the home market’s needs in 2018. It has remained fairly steadily at around this level since 2014, UK steel data reveals. 4.5mt of steel mill products arrived from the other EU 28 members in 2018 whilst 2.0mt landed from non-EU countries.

In terms of steel mill exports, fellow EU 28 countries were also the UK’s biggest trading partner taking 2.8mt of product in 2018 versus only 0.8mt for the rest of the world. The importance of Intra-EU trade to the UK steel sector is therefore clearly highlighted.

UK Steel also once again highlights the significant disparity in energy costs faced by its steelmakers compared to those in France and Germany. Over 2018-19, total electricity costs for UK steel producers are more than double those in France and over 50% higher than in Germany. Wholesale costs, transport costs and so-called policy costs for electricity are all higher in the UK than in the two other countries.


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