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No crisis in structural steelwork supply

November 12, 2015 by NSC in Comment
The words ‘steel’ and ‘crisis’ have been inseparable in newspaper headlines for the past couple of weeks, with good reason as the steel making industry reels under the triple whammy of steel being dumped on world markets at less than the cost of production, high carbon related taxes and a strong Sterling exchange rate. Any industry would suffer against that sort of backdrop.

It is important to stress though that the steel construction sector is not in any sort of crisis, and in fact is confidently forecast to grow by 2% next year after a creditable 5% this year. Nothing has happened or is likely to happen that affects the ability of the UK’s steel construction supply chain to continue to deliver excellent buildings and bridges and other structures on time and within budget.

The price of fabricated steel – like all construction materials – faces a range of upward pressures, which is being offset by raw steel prices, so steel-framed building solutions remain at least 5% cheaper than concrete alternatives. Add on all the sustainability and other benefits in addition to cost effectiveness that come with steel and it is no surprise that around 70% of multi-storey buildings are consistently built with steel.

Steel manufacturing is far from gone in the UK and most of the administrations and plant closures that we have heard about recently were not part of the steel construction supply chain. The Scunthorpe plate mill – that has been mothballed, not necessarily permanently closed – made steel for bridges and other applications that can be substituted through the existing supply chain. Nothing new has to be created or established to ensure that procurement routes for steel construction continue as before.

The UK’s major supplier of constructional steelwork, Tata Steel, has reassured its customers that production of steel sections continues unaffected by recent developments. The BCSA has given its full support to the efforts of UK steel manufacturers to combat the dumping of steel on international markets and ensure level playing fields in energy costs and carbon related taxes.

Imports of raw steel are nothing new. The UK has long used a mix of imported and home manufactured steel which the constructional steelwork industry is used to accessing through an efficient steel stockholding and distribution network. Substantial stocks are always held that would see the UK through the unlikely event of any potential disruption to supplies or quickly react to demand spikes.

The government’s National Infrastructure Plan will create steady growth in the demand for construction services for years to come; it might be coming along slower than the industry had hoped, but delivering it successfully is a central plank of economic policy that will depend on a healthy and vibrant steel construction sector and assured supplies of quality steel – all of which the UK has.

The long-term average of UK structural steelwork consumption is some one million tonnes a year, but it is currently at 862,000 tonnes, so there is a latent capacity available in the industry to accommodate substantial growth.

There is little importing of fabricated steelwork in the UK, with some 98% of structural steelwork fabricated here. The advantages of this include shorter lead times, contractual security, world leading design quality and a health and safety record that is the envy of the construction industry. And you can’t import that.

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