BRITISH STEEL T
he steel industry was once the pride of industrial Britain. From railways to bridges and skyscrapers, the steel industry formed the backbone of the post-war UK economy, employing thousands. Plants like Scunthorpe and Port Talbot became synonymous with British industrial power. Today, however, global competition, privatisation and reduced global demand have had a detrimental effect. Today, British steel contributes only a fraction of its historic output to the global market at just 0.3%. “Obviously there’s been a long story of nationalisation and denationalisation to try and fix the problems of the steel industry,” explains Alasdair McDiarmid, general secretary of Community trade union, the main union in the steel industry that represents workers at all six of the major steel producers and downstream companies too. “We’ve now got several companies that all used to be one: so, we’ve got Tata Steel, which is the biggest steel company based in the UK, with its primary steelmaking operations in Port Talbot; British Steel based in Scunthorpe – they were, until recently, the two big integrated steel works that make steel from iron ore. Tata has now closed their blast furnaces. “Then we have four steel makes that make
steel through the electric arc furnace (EAF) route, and they are Celsa Steel [now 7 Steel] based in Cardiff; Liberty Steel based out of their production hub in Rotherham; Marcegaglia Stainless Sheffield, which is a stainless teel producer in Sheffield; and Sheffield Forgemasters, which is now nationalised and makes steel for strategic purposes, [such as] submarines and that kind of thing,” continues McDiarmid. The potential closure of the UK’s last remaining virgin steel plant, Scunthorpe,
in April only emphasised the deep-rooted problems of the industry. Virgin steel – made from raw iron ore in blast furnaces – is a carbon intensive but critical for many heavy-duty applications. Without it, Britain is dependent on imports, making it the only G7 country without a virgin steel industry. “Certainly, in our view, it’s a crucial part which cannot be allowed to close and there’s a number of reasons,” explains McDiarmid. Scunthorpe is a main producer of long
products such as beams, rods, girders and everything needed to make bridges, roads, schools, hospitals and rails. “British Steel provides 96% of our rail requirements, so it’s a strategically important business that’s vital for delivery of the government’s infrastructure, investment and growth plans.” If we can’t get its products from Scunthorpe, we would need to import them from somewhere else, explains McDiarmid. “So, either we support jobs here or we support jobs elsewhere, and I think the government came to a similar conclusion.” The closure of the blast furnace would cost around 2,000 jobs, rising to 3,300 direct jobs if the whole plant closes, with greater impact across the supply chain and local community, adds McDiarmid.
Sustainable steel The state of the British steel industry is worrying to say the least, producing less and importing more. When McDiarmid entered the industry 20 years ago, the UK held around two-thirds of the market share – now that figure is down to 32%. “We’ve been slowly giving up that market, essentially exporting our hobs over that period of time and now there’s quite a lot of things we can’t make in this country,” says McDiarmid.
“We have a hugely valuable market in the UK – it’s a massive advantage for us if things are done right.”
One of the biggest arguments for closing
blast furnaces is the carbon-intensive nature of smelting ore. However, shutting down our blast furnaces in an effort to be green isn’t the open and shut case it seems. Without the green infrastructure in place to replace this steel production, Britain would need to import in the meantime. “That looks good for the balance of emissions in the UK, but ultimately they’re not making it through green roots on the whole in China, they’re still building blast furnaces over there,” says McDiarmid. It’s not just that either, he adds, “when you’re shipping the stuff halfway across the world, there’s a big climate penalty to pay for that as well. “So, it’s bad for the environment, it’s bad for the security of the country, it’s bad for jobs, it’s bad for working and growth, and it’s certainly bad for regions of the country that really needs those industries.” Moreover, EAF is not a direct substitute for
blast furnaces as they use scrap to make steel instead of raw iron. High-quality steel still needs virgin steel to go into the mix alongside the scrap. The greener alternative, direct reduced iron (DRI), is rare and largely produced in Russia. Without investment in both EAFs and domestic production of DRI, Britain is be left “at the mercy of international supply chain in a very uncertain world”. British steel makers are also squeezed
by international competitors, particularly in China and India, where steel production is cheaper thanks to lower labour and energy costs. “We do have massive problems with global oversupply and particularly the role of China, which now makes half of the world’s
The British steel industry is being squeezed by international competitors, particularly from China and India.
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