BRITISH STEEL
The blast furnace at Port Talbot closed down in 2024.
Image credit: Gareth Abraham/
Shutterstock.com
else. Electric arc furnaces are a big part of the future and we have started transitioning towards it. “Even so, EAFs cannot supply the specialist steels that we need, and we should be moving away from blast furnaces. DRI, Direct Reduced Iron, is the technology most favoured by other countries which are going down that route. We have argued that the UK should start now and invest in a DRI facility initially powered by gas, with an eventual conversion to green net-zero hydrogen when the infrastructure for that becomes available.”
While EAF is more environmentally friendly, scrap steel can contain impurities detrimental to specialised steel.
A level playing field All that will require investment. A once-unified industry has been fragmented over the years into several competing entities, and none of our current steel companies, he says, are large enough to invest in a DRI facility themselves. “If they combined, though, they could do so; and they do between them have a significant requirement for the virgin steel that DRI produces.”
It is something the government should be looking
very carefully at, says McDiarmid. “It is a really good case for government investment. You are not putting money in to prop up one particular company or to advantage one company over another. You could invest in developing a really important industry, which would give security of supply and security for the economy of the country. It would give us our own end-to-end UK supply chain: DRI and EAF together would enable us to make the full range of steels. So that’s certainly an argument we would continue to make.” And the final cost of the UK-produced steel? “How do you measure price?” he asks. “Yes, you might be able to get cheaper Chinese products; but don’t forget that Chinese steel is made in the dirtiest way possible, with huge state subsidies and virtually no environmental restrictions – then it is put on a ship and transported halfway round the world with significant cost to the environment. “We always argue that we have to compete on a
level playing field, but it is important for a country to be able to stand on its own two feet.” And the government has released steelmakers from environmental energy tariffs, which is one move at least towards reducing their energy costs.” We have arrived, by happenstance, at what may be a transformative moment. UK-produced steel used to supply more that 60% of the domestic market. It is now nearer 30%. That may be depressing; but it can also be a cause for optimism. There is a large market share available for recapture. A revitalised UK steel industry, producing low-emission steel, of high quality and grades, by EAF and by Direct Reduction of Iron, might be smaller in volume than in the past but would be much more strategically focussed. It would free us from relying on a global market that is efficient in good times but fragile in crises. It would be an escape from a legacy of aging industrial processes and of forty years of de- industrialisation and decline. It does seem that it might not be impossible.
36 | September 2026 |
www.hoistmagazine.com
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