Importance of Steel in the UK Economy

Steel is crucial for the nation’s future. It supports 34,000 jobs across various sectors, including construction, automotive, defense, and low-carbon energy generation.

Challenges Facing the Steel Industry

Despite its strategic significance, the UK steel industry struggles with declining competitiveness and rising imports. Our manifesto emphasizes leveling the playing field and enhancing competitiveness. This focus will foster regional economic equality, creating well-paid jobs and attracting investment in Wales, the Midlands, South Yorkshire, and the North East of the UK.

UK Steel’s Election Manifesto

UK Steel’s election manifesto outlines a strategy to secure the sector and elevate steel in political discussions. It presents seven key policy pillars essential for the UK steel industry’s success:

1. Lowest Industrial Electricity Prices in Europe
   • Competitive electricity prices are vital for the UK’s steel industry. We need parity with competitors on network charges and reform of the wholesale electricity market.
2. Steel Scrap Competitiveness and Recycling Capability
   • Scrap steel is strategic for a Net Zero future. By 2030, UK demand for scrap could rise by 70%, and global demand by 30%. The UK produces over 10 million tonnes of steel scrap annually, ideal for electric arc furnace steelmaking.
3. Decarbonisation Through Government-Industry Partnership
   • The UK steel sector aims to cut emissions by 80% by 2035 and achieve Net Zero production by 2050. We seek collaboration with the government for matched investment and support.
4. Investment in Innovation
   • The UK has top-notch research and innovation capabilities. We must seize the opportunity to lead in green steelmaking.
5. UK CBAM by 2026
   • Implementing a Carbon Border Adjustment Mechanism (CBAM) is crucial for fair competition. A UK CBAM proposed for 2027 lags behind the EU’s, risking trade diversion.
6. Robust Trade Defence
   • Global trends like rising overcapacity and protectionism distort fair competition. Strong trade defenses are essential for UK steel producers.
7. Leverage Power of Public Procurement
   • Public projects account for over 10% of UK steel demand. The government can utilize this to strengthen UK industry and maximize public expenditure benefits.

Economic Contributions of the UK Steel Sector

• Produces 5.6 million tonnes of crude steel annually, meeting about 70% of the UK’s requirement.
• Directly employs 33,700 people, supporting an additional 42,000 jobs in supply chains.
• Median salary in the sector is £37,315, 26% above the UK national median.
• Contributes £1.8 billion directly to UK GVA and an additional £2.4 billion through supply chains.
• Contributes £3.4 billion to the UK’s balance of trade.
• 96% of steel used in construction and infrastructure is recycled for repeated use.

Trends in Steel Imports

According to the UK Steel Key Stats Report 2024, net imports reached 4.6 million tonnes in 2023, capturing a 60% share, up from 55% the previous year. While total imports decreased, volumes from Asian countries like India and Vietnam, as well as France, increased due to lower electricity costs. Data from Q1 2024 indicates an even higher import penetration of 67%.

For more information, please see the 2024 press pack, “Why the UK Needs a Strong Steel Sector,” or the 2024 UK Steel Key Statistics report.