The UK steel sector still needs some level of imports, despite the planned reductions in quota allowances, according to UK Steel’s director-general, Gareth Stace.
He told the Green Steel Challenge podcast, co-produced by Kallanish, that unlike the EU, the UK does still require imported tonnages.
“The EU could be self-sufficient … but in the UK, we need imports,” he added.
He described 30% of UK demand being met domestically as “unsustainable”, which will not attract investment, compared to 80% in the US and 75% in the EU.
“Yet both of those steel sectors, economies and governments are putting in very strict and very significant trade remedies policies to protect their industry,” he added.
He also highlighted that one-third of UK government steel procurement is from abroad.
Stace noted that steel production in China and other Far East countries is “being highly subsidised by their governments” and therefore able to be exported at any cost, undermining prices in other countries. Other producers cannot compete with this, no matter how competitive they are.
“You can never compete with steel that is 70% or 80% state owned and 100% state controlled and fully subsidised by their government,” he added.
He also expressed concern over the EU’s quota reductions as 80% of UK exports go to the region, which could cause job losses if there is not a deal between the two economies.
“I think we should allow lots of imports from the EU and the EU should allow lots of exports from the UK into the EU market,” he said. “I hope that we can work with similar economies to ours that don’t want to see dumped steel, subsidised steel, undermining and wrecking our market and stopping investment.”
He expects a rapid rise in market share for domestic producers, following the new quotas starting on 1 July, noting the government’s ambition to reach 50% of domestic consumption being met by UK produced material. “I’d like to think that was within one year, two years, I hope,” he added.
However, he noted that British Steel is losing market share in the construction steel segments of sections and girders due to “short-sighted” emissions requirements. “Architects are specifying they want green steel, and they see green steel as electric arc furnace steel,” he said.
Stace also highlighted the Welsh government stipulating electric arc furnace steel for all of its publicly funded projects.
“If you continue to buy imports of electric arc furnace steel rather than support British Steel at the moment to make that transition to electric arc furnace production, then it’s never going to be able to do it,” he said. “If we don’t see a quite a quick sea-change in the construction sector in those specifications of what they’re specifying, then I think we’ll see further loss of market share from British Steel and further imports on sections from other countries, whether that’s in Europe or somewhere else.”
“Those countries in Europe will make sure that they’re sending their EAF sections to the UK market and perhaps keeping their blast furnace sections for their home market. Therefore, in the scheme of things, it doesn’t really help global emissions and it certainly doesn’t help the UK steel industry,” he concluded.
