15th September 2021

Commenting on recent power price spikes that have affected UK steelmakers, UK Steel Director General, Gareth Stace said:

“These extortionate prices are forcing some UK steelmakers to suspend their operations during periods when the cost of energy is quoted in the thousands per megawatt hour; last year, prices were roughly £50 per megawatt hour. Even with the global steel market as buoyant as it is, these eye-watering prices are making it impossible to profitably make steel at certain times of the day and night.

“While prices have risen across Europe, wholesale prices have quadrupled in the UK and merely tripled in Germany, when accounting for carbon costs. This exacerbates the already grossly unequal electricity price disparity between UK steelmakers and our European competitors.

“The government and Ofgem must be prepared to take action as this situation continues. Spot prices of over £2,000/MWh are the signs of a unhealthy energy market. Electricity prices increase in the winter months, therefore the situation gets more urgent each and every day.”

Notes:

About UK Steel: UK Steel, a division of Make UK, is the trade association for the UK steel industry. It represents all the country’s steelmakers and a large number of downstream steel processors.

UK steel in numbers:

• Produces 7 million tonnes of crude steel a year, around 70% of the UK’s annual requirement (annual demand of 10.2MT used rather than 2020 figure)
• Employs 33,700 people directly in the UK and supports a further 42,000 in supply chains
• The median steel sector salary is £34,299, 33% higher than the UK national median and 45% higher than the regional median in Wales, and Yorkshire & Humberside where its jobs are concentrated
• Makes a £2.1 billion direct contribution to UK GDP and supports a further £2.7 billion
• Makes a £1.7 billion direct contribution to the UK’s balance of trade
• 96% of steel used in construction and infrastructure in the UK is recovered and recycled to be used again and again