UK’s best future in steel research and niche production

Materials World magazine
,
1 May 2016

Chairman of the IOM3 Iron & Steel Society, Mick Steeper, discusses the most promising options for the UK’s steel industry

As we went to press, UK Business Secretary Sajid Javid returned from an emergency meeting in Brussels addressing the global steel crisis, which was attended by representatives of 30 countries, including China. It ended with no formal agreement, but Javid claimed that China has ‘recognised that it is a problem of overcapacity in their country’, and is ‘commiting to do something about it.’

The fate of Tata Steel’s Port Talbot Steelworks remains, at time of writing, unresolved – the latest news is that the sale of Tata’s remaining UK operations, which was announced at the end of March, will be overseen by its new head of UK operations, Bimlendra Jha, who led the sale of its Scunthorpe works to Greybull Capital in April. 

But why are manufacturers of, arguably, the world’s most useful engineering material losing money? ‘The fundamental reason is this endemic tendency for overcapacity’, Mick Steeper, Chairman of the IOM3 Iron & Steel Society tells Materials World. ‘Every developing economy needs a domestic steel industry to build its infrastructure, but that guarantees that 15–20 years later it will have more than its domestic needs, so it goes into export. That’s what China has done, and it is the most extreme swing of that cycle that has ever happened, because Chinese industrial growth has been so massive.’ 

Steeper believes that the future for British steel lies in niche, low-volume operations rather than large-scale production, and in world-leading research more than production. ‘I think, insofar as the UK and most developed economies have a future in steel, it’s going to be in units with much lower minimum economic volume’, he says.

‘The traditional hierarchy of British steel is being inverted – small, flexible plants are becoming far better assets than big integrated plants with high minimum economic volumes.’ Developing further understanding of the distributed properties of superior-grade profile steels, he says, is the UK’s best proposition. ‘We’re just going to have to get used to the idea that steel and its application metallurgy is what the UK will trade on in future, and not its production. Just making tonnes of the stuff, I’m afraid, can be done anywhere, and most places can do it much cheaper than in the UK.’