Act now to save UK steel sector, says metals coalition

Leading metal recyclers in the UK are partners in an industry wide coalition urging government action to unlock the economic and environmental potential of UK steel scrap.

A report from the Circular Steel Sub-Committee points out it is currently cheaper to export scrap and import products made abroad than to process the scrap and manufacture steel goods from it domestically. The report, Circular Steel: Strengthening the UK’s Industrial Supply Chain, calls it ‘a fundamental challenge within the metal recycling and steel sectors’.

The UK produces 10 million tonnes of steel scrap a year and more than 80% is exported. Much of that material then returns to the UK in the form of finished goods, undercutting domestic processors and manufacturers and exporting jobs and emissions.

The absence of domestic large-scale, scrap-intensive, electric arc furnace (EAF) steel production has prevented the growth of a strong UK market for high-quality steel scrap. 

Structural challenges

The report identifies a number of structural challenges that inhibit the UK industry’s ability to capitalise on the country’s steel scrap potential. This ranges from insufficient domestic processing capacity and high industrial energy costs to inconsistent quality and enforcement standards across the metals recycling supply chain.

To address these barriers, the Circular Steel Sub-Committee is urging a combined effort from governments and regulators. A key proposal is a Code of Standards, led by the industry, designed to enhance quality assurance and traceability and to lay the groundwork for future national standards.

Five key calls

The report recommends governments to:

• support investment in domestic scrap processing infrastructure
• address cost disparities between domestic and export markets
• introduce national definitions and standards for EAF-grade steel scrap
• modernise regulatory oversight, including unified licensing and inspections for recyclers
• include recyclers in the British Industrial Competitiveness Scheme to reduce energy costs and support product and market transformation

Recycling role

Jacob Hayler, chair of the sub-committee, argues the UK’s steel scrap resource is one of the country’s greatest industrial assets but the policy framework that drives the market has not kept pace with the shift to low-CO2 production.

‘It costs less to export steel scrap for processing and manufacture abroad then re-import those steel products, than it does to process and manufacture it domestically. That must change if we are to retain jobs, encourage investment, and support resilience in the UK’s manufacturing base. The UK has the scrap, the skills, and the ambition to be a global leader in circular steel.’

Tony Hayer, md of S. Norton Group, adds: ‘Recycling is the backbone of EAF steelmaking but the system must evolve to meet the needs of a modern, low-carbon economy. With the right policies on energy pricing, regulation and infrastructure investment, we can build a competitive domestic recycling base that keeps value, jobs and carbon savings in the UK.’

View the report here >>