Final dates! Join the tutor2u subject teams in London for a day of exam technique and revision at the cinema. Learn more

Explanations

Does the UK economy need a steel industry in the UK anymore?

Geoff Riley

8th April 2023

An excellent 12 minute video here on the future for the UK steel industry. It is not clear that the UK any longer has a competitive advantage in steel. But might the UK become the first modern developed economy to lose the entirety of their steel industry? In this special report, Ed Conway from Sky News looks at the future of the steel industry in the UK - and whether we need one - as the sector comes under intense cost pressure. Lots to consider here including the discussion about the arguments for and against government support and the extent to which taxpayers might shoulder some of the burden of a shift towards cleaner, greener steel-making to help the UK reach their net zero commitments?

Total production of crude steel in the United Kingdom (UK) from 2009 to 2021 (in 1,000 metric tons)

The UK steel industry is facing a number of economic challenges in 2023, including:

  • High energy costs: The UK steel industry is a major energy user, and the recent increase in energy costs has put a significant strain on the industry's finances.
  • Low demand: The global steel market is currently in a state of oversupply, which has led to lower demand for UK steel.
  • Competition from lower-cost producers: The UK steel industry is facing competition from low-cost producers in countries such as China and Russia.
  • Environmental regulations: The UK government is planning to introduce new environmental regulations that will make it more expensive to produce steel in the UK.

These challenges are having a significant impact on the UK steel industry, and it is unclear how the industry will be able to overcome them.

Geoff Riley

Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.

© 2002-2024 Tutor2u Limited. Company Reg no: 04489574. VAT reg no 816865400.