The UK’s steel lobby group has given a tepid and conditional welcome to the government’s new EAF-focused strategy. While UK Steel called the plan an “encouraging… clear future vision,” it immediately warned that new furnaces would be useless without a “stronger business environment,” specifically “lower power prices.”
This demand is at the heart of the UK industry’s long-standing complaints. UK steelmakers pay significantly more for electricity than their European competitors, making them uncompetitive even before accounting for global tariffs and oversupply.
The government’s new plan, backed by Business Secretary Peter Kyle, actually doubles down on this problem. Electric arc furnaces, which “use electricity to melt down scrap,” are far more power-intensive than blast furnaces. Without a fix for high energy costs, the new “green” plant could be even less profitable than the old one.
Frank Aaskov of UK Steel also demanded “robust trade policies.” This is a nod to the “chaos” Kyle himself mentioned, including oversupply from China. The industry is effectively telling the government that a new furnace is a “nice-to-have,” but a level playing field on energy and trade is a “must-have.”
The December steel strategy will now be judged on these criteria. The industry is looking for more than just capital investment; it’s looking for a fundamental reform of the policies that have hamstrung it for a decade.