UK Steel reacts to government infra-spend
Steelmakers association UK Steel suggests the government should move towards a "Buy America" model for material procurement, prioritising domestic steel to "boost the social and economic benefits" of the projects.
The UK is anticipated to require 1mn t/yr of steel as infrastructure spending increases — the government budget announced yesterday promised £600bn of infra investment over the next five years.
UK-based steelmaker Liberty Steel also said the UK should prioritise the use of domestic steel to "avoid" other mills finding themselves in the same position as British Steel at Scunthorpe. British Steel is the major rail supplier to track operator Network Rail.
Many in the steel market, certainly on the trading side, would not want to see a Buy America-like model implemented. While it makes sense to support an industry with lower energy costs and business rates — something definitely required in the UK — reducing competition typically sees domestic capacity become outdated and uncompetitive in the global playing field, irrespective of industry. Buyers also want cost-effective and competitive material.
While the International Steel Traders' Association also welcomed the government's planned infra-spend, it suggests a "mix of UK, EU and non-EU supplies of steel" should be utilised.
"As with all projects cost, timely delivery is a key factor and it is important that the UK continues to be a free market economy thus enabling it to remain a competitive trading nation," the association said.
UK Steel said the infrastructure investment is good news, particularly for the under-invested areas outside of the southeast.
By Colin Richardson
source: Argus Media
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