Support needed as British Steel price up 70% in 2021
The British steel industry has been in decline for some time and the closure of plants in recent decades has affected not only the communities they serve, but the businesses that buy the raw material and the customers who rely on the end product.
Imports of cheaper steel from abroad have played a part in the demise of the British steel industry but since the coronavirus pandemic shook the world, many are having to look closer to home as overseas product is held back for domestic trade. However, this is proving problematic for businesses who are finding that the price of raw British steel has rocketed more than 70% in 2021, meaning margins either have to decrease or the customer bears the brunt.
One of the UK’s leading loading and unloading specialists, Thorworld Industries, has seen first-hand the damage caused by an under-funded British steel industry and the knock-on effect this is having for businesses and customers. Thorworld’s Managing Director, John Meale, is having to balance expectations of the business and its customers to ensure everybody is happy and understanding of the current climate.
Thorworld Industries produces container ramps, loading platforms and dock levellers, and has experienced a sharp increase in raw material cost and lead times in 2021 alone. Britain produces considerably less steel than its overseas counterparts and its price point has historically put businesses off. Now the product is in greater demand – and there is less of it – domestic prices in Britain are becoming unsustainable in the long term.
John Meale, Managing Director of Thorworld Industries, commented:
“From January 2021 to July of this year, the price we’re paying for steel has rocketed and there aren’t signs of slowing down. Lead times have increased and we’re having to have very honest conversations with our customers. Thankfully, our up-front transparency and planning has caused little friction to trade so far, as customers understand the problems we and many other businesses are facing.
“The Government needs to invest into British steel and build confidence of our product and production methods. British steel has been fighting a losing battle against foreign imports but it’s clear to see we need to increase domestic production to create jobs and bring down prices for business in order for them to survive. As it stands, prices are fluctuating on a daily basis.
“This will not be a short-term fix but we need to start planning now so we can be a self-sufficient manufacturer of raw steel to enable businesses up and down the UK to thrive.”
Rob Oliver, Chief Executive of the Construction Equipment Association, commented:
“The steel supply issue has been high on the agenda for many manufacturing businesses. A combination of the new quota arrangements with the EU and the uneven recovery of the covid-affected world economy has produced costly logjams in the supply chain.
“Overseas investors have shown confidence in the UK steel sector but shorter term requirements have produced a significant imbalance in supply and demand. It is a classic case of business being bump started after the covid shock and the ingredients for meeting market demand not all being there at the same time.”