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SOS: Steel Makers Blame Tory Government For Uncompetitive Energy Prices

May 28, 2019
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By Paul Homewood

 

 

From GWPF:

 

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The demands come as 25,000 jobs hang in the balance with British Steel last week being placed in compulsory liquidation and put in the hands of the Official Receiver.

Energy costs faced by Britain’s steel makers are some of the highest in Europe, with the industry paying twice as much for power as competitors in France and 50pc more than those in Germany.

According to data from trade body UK Steel, British steel companies pay £65.07 per megawatt/hour (MWh) for power, compared with £30.92 for rivals in France and £43.11 in Germany.

Speaking as British Steel collapsed, Greg Clark, the Business Secretary, pledged to “pursue remorselessly every possible step to secure the future” of the company.

Now major players in the sector are challenging Government to come good on these promises by reducing power costs, which are driven up by policies such as decarbonisation initiatives.

They also say tax policies which discourage investment to improve facilities need to be re-examined, as the companies face higher business rates if the pump money into steelworks.

Insiders says that without action, British Steel could be a warning of the future faced by the wider industry.

Luis Sanz, chief executive of Celsa, said the company’s Cardiff plant has one of the most energy efficient furnaces in Europe.

However, he warned: “No amount of energy efficiency can make up for the gap in the unit cost of electricity.”

Steel making in the UK has “every reason to expect a vibrant future”, Mr Sanz said, “once the right business environment is constructed to compete on a level playing field”.

The view was echoed by Tata Steel UK. Deirdre Fox, its director of strategic business development, said that UK steel makers are at an “immediate disadvantage” to rivals in Europe.

“This is a disadvantage which could be changed and would allow the UK sector to attract international investment rather than watching it go to markets with more favourable conditions.”

Full story

 

Meanwhile, steelmakers in the rest of Europe seem to be faring little better as EUROFER report:

 

Against the backdrop of the EU elections the European Steel Association calls for urgent action by EU policy makers to help the sector as it faces down the flood of steel exports deflected to the EU because of the US’ imposition of steel import tariffs in 2018.

EUROFER also calls on EU policy makers to meet with them urgently to discuss how to end the crisis. Mr Axel Eggert, Director General of EUROFER said that

“There has been a sudden and markedly negative shift in the prospects of the European steel industry in recent months – and the terrible consequences are plain to see. We have seen announcements of actual or potential plant closures in several EU member states over the past few weeks. The bill of direct jobs immediately at risk exceeds 10,000. Given the EU steel industry’s multiplier effect, the loss of indirect employment in the supply chain could top 100,000.”

Global overcapacity is the principle underlying factor of the present crisis but the direct cause is the vast flood of exports targeting the EU market. Imports rose 12% to nearly 30 million tonnes in 2018 in the wake of the imposition of the US’ section 232 steel tariffs. High and volatile raw material prices, slowing demand in downstream sectors, sharply higher carbon costs five times higher than at the beginning of 2018 and borne by EU steel producers but not by imports of steel into the EU and faltering EU economic performance have also increasingly squeezed the sector in recent months.

https://steelguru.com/steel/european-steel-industry-calls-on-policymakers-to-end-steel-crisis-and-to-save-hundreds-of-thousands-of-jobs/541026

36 Comments
  1. May 28, 2019 6:28 pm

    Reblogged this on Climate- Science and commented:
    Stealworks need a lot of energy and in this case wind and solar energy is totally useless. The costs are rising up without limits.

  2. Shoki Kaneda permalink
    May 28, 2019 6:30 pm

    Steelmakers are sequestering carbon within the iron alloys they produce. They should be applauded.

    • Athelstan. permalink
      May 28, 2019 7:12 pm

      😉

    • May 28, 2019 7:50 pm

      CO2 is just a pantomime villain anyway, but the climate clowns are doing much damage.

  3. Thomas Carr permalink
    May 28, 2019 6:33 pm

    See Liam Halligan’s article on page 3 of the business section of the the Sunday Telegraph on 26th May to see what the EU’s emissions trading scheme to make UK steel production costs so problematic.

  4. charles wardrop permalink
    May 28, 2019 7:03 pm

    High time to ditch all the useless greenery, an albatross to business as to taxpayers, of no benefit to normal people not in the money from decarbonisation.
    Past time for CCActs repeal, perhaps the worst legislation in living memory.

  5. keith permalink
    May 28, 2019 7:08 pm

    Until you get rid of Hammond and Clarke, nothing will change, and by then it will be too late. The Tory’s are totally useless.

    • Mack permalink
      May 28, 2019 11:27 pm

      And many of the new pretenders to the Tory throne have been broadcasting their ‘green credentials’ by demonstrating their zeal to combat ‘climate change’, not least Michael ‘et tu Brute’ Gove but also Dominic Raab. And, Raab’s meant to be a proper right wing realist for Christ’s sake! The Tories are well and truly doomed. The only ‘popular’ politician who speaks any sense on climate change related economic and political issues in the UK is………… a certain Nigel Farage. And, if memory serves me correctly, he was a one time Tory supporter and activist who only defected when his party decided to ditch their conservative principles. Funny that.

  6. John F. Hultquist permalink
    May 28, 2019 7:13 pm

    My guess is that steel is the poster for this issue.
    Lighten the cost to steel and all other industries and all the people.
    Otherwise, there is going to be a short tail on the decline of a once prosperous nation.

  7. Athelstan. permalink
    May 28, 2019 7:21 pm

    What greatly vexes me, is, why does Britain play so fastidiously and bending over to keep to, by the rules and everybody else clearly does not and therein, why is the green advocacy and economic menace so strong here and yet nigh totally ignored in the rest of the EU?

    Have we as a nation gone collectively bonkers?

    Is it also that here in the UK, far, far too many clueless women (and men) are strapped in, awarded all far to easily, hold positions of great power? And then, there are too many sociologists, humanities grads, lawyers and economists and bus studs and far too few to no, draftsmen, qualified engineers, dedicated honest scientists…………… anywhere to be found.

    • Bertie permalink
      May 28, 2019 9:39 pm

      It has always been thus as our politicians are totally in thrall to the EU bureaucrats. Which is why we enact every piddling little rule they dictate without question. France, for instance, just cherry picks the edicts it agrees with otherwise the farmers close the country down!

      • Athelstan. permalink
        May 28, 2019 10:19 pm

        Ah vive les paysans! if only, it makes me fulminate but getting angry ain’t no good, this needs to be righted and to do that, the whole shebang and advertising green advocacy needs to be shut down (easily done stop government funding it: ie you and me) and also stop the agitprop in UK schools.

    • May 28, 2019 10:53 pm

      @Athelstan it’s cultural
      In the UK a rule is thought of as a rule.
      in Europe a rule is merely a GUIDELINE

      • Rowland P permalink
        May 29, 2019 8:05 am

        Rules are made for the obedience of fools and guidance for wise men!

      • Athelstan. permalink
        May 29, 2019 8:56 pm

        It does seem so.

        It needs to change and forthwith.

    • Jon permalink
      May 31, 2019 1:34 pm

      The other countries are not breaking the rules. There is allowances to veto or apply these costs selectively to heavy industry that has no alternatives. The UK government decides not to do this.

  8. derek spence permalink
    May 28, 2019 7:26 pm

    The Australian election last week was won because the Libs said that they were going to support CO2 emitting energy sources to save jobs. They focused on the imminent job losses which would happen if the priority that Labour was giving to climate change strategies and the impact on jobs and energy costs. They also have the experience in South Australia where energy costs are high; they have had blackouts; businesses have closed-all as a result of the Labour climate change initiatives. Both Labour and Conservative policies in the UK are similar and the resultant outcome will make no difference in a world where China and India are still pumping out CO2.

    • May 28, 2019 7:58 pm

      Alas the public has not had a say in this. The UK Climate Change Act was a stitch up, with only a handful of MPs voting against it.

      • May 28, 2019 10:55 pm

        One of them was Anne Widdecombe MP
        … now Anne Widdecome Brexit Party MEP elect

  9. Will permalink
    May 28, 2019 7:53 pm

    Its not confined to manufacturing of steel! All manufacturing is suffering from energy hikes thanks to Government ‘green’ policies (which are not)
    Reducing our CO2 in the UK, only to have the same products made in China. It only increases our ‘world’ contribution to CO2 when transport costs are are added. Our stupid MPs cannot, or do not want to understand.. Small companies cannot clam back any CC charges. Unfortunately all the main parties are equally inept.They seem to think that it will be good for the UK to save ‘the world” by making UK industry uncompetitive.
    Virtue signalling is important for their reelection.

  10. Pancho Plail permalink
    May 28, 2019 8:09 pm

    Carbon trading is a get rich quick scam that ought to have been made illegal ages ago.

  11. jack broughton permalink
    May 28, 2019 10:03 pm

    CCA => home, roost, coming, chickens,to.

    But who pays?

    • Gerry, England permalink
      May 29, 2019 1:46 pm

      The people like always.

  12. Gamecock permalink
    May 28, 2019 10:44 pm

    U.S. has energy cost under control.

    But businesses are still harassed by OSHA, EPA, EEOC, CPSC, USDA, BIS, BSEE, CSB, USCIS, DOC, OoC (Mark Steyn used to joke about this one), ODEP, EBSA, ETA, SSA, FERC, FLRA, FMSHRC, FMCSA, FTC, FTA, FDA, FNS, FSIS, FE, GIPSA, ICE, BIS, DOI, IRS, DOL, BLS, MSHA, NIOSH, NIST, NLRB, NTSB, NRC, OSHRC, ODEP, OEM, OFE, OLHCHH, OMHP, ONE, OPM, OSTP, OSMRE, PTO, PBGC, PHMSA, PA, RRB, RITA, BSEE, OSTP, SIP, SEC, SBA, DOT, TSA, USAOC, USCSB, USCIS, DOE, CERT, and WMD.

    U.S. businesses still have plenty of reasons for moving off shore.

    • Bertie permalink
      May 29, 2019 6:26 am

      I know not what any of this alphabet soup relates to!

      • Gamecock permalink
        June 1, 2019 1:50 pm

        These are U.S. federal agencies regulating business. To death. Incenting them to move off shore.

  13. May 28, 2019 11:07 pm

    The UK govt are so dumb
    they want to Keep the £789m/year susbsidy hole that is Drax
    ..and 22 miles away ditch the Scunthorpe steelworks that pays millions in taxes/rates

    The morning Radio Humberside and this evening Look North Hull were plugging the Drax magic dream of a local CCS hub.
    (LN had a hint of skepticsm)

    ……. Greens Kill Jobs

    …………….. Greenz Meanz Taxez

  14. It doesn't add up... permalink
    May 29, 2019 1:08 am

    It was I suppose entirely predictable that the ECSC morphed into the organisation that is killing coal and steel in Europe. Now they aren’t even beating ploughshares.

  15. Coeur de Lion permalink
    May 29, 2019 8:34 am

    “Greens Kills Jobs” struck a chord. Needs reciting wherever. Bumper sticker if you want your car scratched.

    • Phoenix44 permalink
      May 29, 2019 9:20 am

      The trouble is the truth is too complex for a bumper sticker. Green creates jobs but more jobs where there used to be fewer, which increases the cost of what is being produced. That means we have less to spend on other things which kills those jobs. So Green kills productive, skilled, highly paid jobs but creates unproductive, low skilled, low paid jobs.

  16. Gerry, England permalink
    May 29, 2019 1:49 pm

    Allegedly there are 80 companies interested in taking over British Steel. I find this very hard to believe given the state of the steel market not just in Europe but globally. And they must be aware of the additional costs of operating in the UK not to mention the shrinking of the car industry that may be customers.

    • May 29, 2019 11:23 pm

      I’m in Scunthorpe everyone knows the plant is a good industry

      However the crazy EU/UK climate/energy policies make it a poisoned chalice.

  17. May 31, 2019 12:25 am

    “global overcapacity ” – purely caused by Chinese State sponsored overbuild of steel plants .
    With the aim of dumping on the markets till they own it – against WTO rules .
    But nobody cares about WTO rules whe it comes to China

  18. johnbillscott permalink
    May 31, 2019 4:36 pm

    A decarbonized economy can only be achieved by de-industrialization, however, the politicians due to their gross ignorance cannot comprehend this simple fact. They are caught up in virtue signalling and feel so good about themselves never mind the redundant workers whose lives are being ruined. At least in Australia they have made decisions reflecting their bad experience with the green economy. Our policies simply move industry and all the spin off benefits to other countries who obey no rules. Greens and politicians should realise that there is no impervious boundary from the ground to the firmament to isolate us from the effects of industry half a world away.

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