Rising Energy Costs Forcing UK Steel Companies To Halt Production
Steel production in the UK has been forced to halt temporarily this week due to the spiraling cost of energy.
UK Steel, the trade body for the sector, warned that production could decline further next year if the government does not extend and improve its support for businesses’ energy costs.
The current Energy Bill Relief Scheme is set to expire in March and an announcement is due in the coming weeks about what will follow.
UK Steel director general Gareth Stace said:
“Electricity prices are at 30 times their historical average this week, forcing some steel companies to cease production at key times during the day. This is simply not sustainable for the steel sector.
A long-term solution will be found in infrastructure investment and fundamental market reform, but in the interim, we need a bridging solution that ensures UK steel producers can make steel at the same cost as their European competitors.”
The cost of energy inputs during production is one of the main factors determining its sale price.
Stace noted that the German government’s support package for 2023 guarantees wholesale electricity prices at €130/MWh (£113), well below the UK’s current cap of £211/MWh.
“The UK government should match this to ensure our industry’s ability to compete,” he said.
“Without the continuation of the [scheme], our estimates show electricity prices being double those of the German industry’s next year, leading to reduced production, shrinking market share, and increased imports.
“Prolonged and frequent halts to production could become the norm, negatively impacting productivity and leading to a decline in steel production in the UK.”
See more here climatechangedispatch
Header image: The Conversation
Editor’s note: declining steel production is exactly what climate alarmists want, with the eventual aim of seeing it cease permanently.
Please Donate Below To Support Our Ongoing Work To Defend The Scientific Method
PRINCIPIA SCIENTIFIC INTERNATIONAL, legally registered in the UK as a company 
incorporated for charitable purposes. Head Office: 27 Old Gloucester Street, London WC1N 3AX.
Trackback from your site.