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- HM Government launches consultation process to strengthen steel sector.
- Strong steel industry would equate to driving economic growth and job creation.
- Geopolitical tensions underpin necessity for resilient UK steel strategy and market.
In a significant move to bolster the steel sector, the UK Government has initiated a consultation process aimed at shaping the future of the industry. The call for feedback comes as part of a broader narrative focussed on supporting growth in key areas, such as Advanced Manufacturing and Clean Energy, backed by a substantial £2.5bn investment from the National Wealth Fund.
The primary objective of this initiative is to ensure a competitive and flourishing UK steel industry, which Government envisages as vital for driving economic growth and creating jobs across the country. Thus, continuing the new Government’s interventionist and conciliatory approach in shaping industrial policy.
The consultation aligns with other critical priorities, including the trade strategy, Strategic Defence Review, Invest 2035, and the broader industrial strategy, highlighting the connection of these initiatives in fostering a resilient economy.
The Rt Hon Jonathan Reynolds MP, Secretary of State for Business and Trade, has emphasised the importance of industry input in refining HM Government’s steel strategy by which feedback is required by 31st March. Government has committed to a quick delivery of the plan as early spring this year.
Reynolds commented: “Steel is critical to the modern economy, and the economy of the future. The central mission of this government is growth. Steel can, and will, have an enormous role to play in driving that growth. As well as supporting our mission of making the UK a clean energy superpower, steel is a fundamental component in activities such as the construction of wind turbines, manufacturing the next generation of electric or autonomous vehicles, or building the infrastructure needed to sustain our digital economy.”
In the context of the supply chain, resilience within has become increasingly vital, particularly in the context of materials like aluminium and high-performance steel. While aluminium prices have rebounded to pre-Covid levels, challenges remain, especially concerning specialist and high-strength steel.
The export dynamics are heavily influenced by geopolitical tensions, notably the ongoing Russia-Ukraine conflict and suggested trade policies launched by US President Trump’s newly-formed administration.
On 10th February, Trump announced a 25% reciprocal tariff on countries imposing tariffs on US steel and aluminium, raising concerns about potential retaliatory measures and their implications for international trade.
As the President evaluates these tariffs, the ramifications for supply chains on both sides of the Atlantic warrant close attention, as they could significantly impact material availability and pricing in an already volatile market.
The uncertainty surrounding these geopolitical factors highlights the need for robust strategies to enhance supply chain resilience and through the support and growth of UK steel, which seems more important than ever.
Sources:
The steel strategy: the plan for steel – GOV.UK
Understanding the Defence Industrial Strategy’s Statement of Intent