UK reduced steel production by 6.5% y/y in 2023

UK steelmakers reduced steel production by 6.5% in 2023 compared to 2022, to 5.6 million tons. Thus, the country ranked 26th in the global ranking of steel producing countries by WorldSteel, according to the association.

Steel production in the country has been on a downward trend for the second year in a row. In 2022, production decreased by 15.6% y/y – to 6.2 million tons, while in 2021 the figure increased by 3.9% y/y – to 7.4 million tons. In 2021, the country was ranked 24th among steel producing countries.

The UK has 6 operating steel mills, including:

• Tata Steel Port Talbot (capacity: steel – 5 million tons/year, pig iron – 4.77 million tons/year);
• Celsa Steel UK Cardiff plant (steel – 1.2 million tons/year);
• Marcegaglia Sheffield steel plant (steel – 0.5 million tons/year);
• GFG Liberty Steel Rotherham EAF (steel – 0.78 million t/year);
• GFG Liberty Steel Rotherham (steel – 1.22 million tons/year);
• British Steel Scunthorpe (steel – 3.2 million t/year, pig iron – 3 million t/year).

Tata Steel has recently announced that it will shut down two blast furnaces at its Port Talbot facility by the end of 2024. The shutdown is part of a plan to reorient the UK steel business by switching to electric arc furnaces. The company is the largest steel producer in the country, so this event may affect the industry’s performance in 2024-2025.

The new electric arc furnaces are likely to be built with government support. Last year, the British government agreed on a £500 million ($620 million) support package for Tata Steel’s green transition. The company was expected to invest £1.25 billion, including a grant from the government, in new electric arc furnaces to make steel production more environmentally friendly at the plant. Trade unions warned that the deal would have «devastating consequences» as it would lead to the loss of 2,800 jobs, 2,500 of them over the next 18 months.