Steel producers’ enthusiasm for strategy tempered by competitiveness concerns
22 Mar 2026
The Government’s recently announced Steel Strategy has received an enthusiastic reception from the sector’s leading trade association, despite continued reservations about energy prices.
UK Steel said the strategy outlined a commitment to fostering a “robust and competitive” steel sector.
It acknowledged the Department for Business and Trade had made “massive strides” towards attracting private investment to ensure the future.
UK Steel director general Gareth Stace commented:
“The Government’s bravery in taking the required measures represents a real shift in the culture of Westminster from protecting the ideology of free trade at any cost, to defending critical industries and national security.
“This is a crucial moment: with global markets distorted by overcapacity and subsidy, a clear and ambitious domestic strategy is exactly what is required to ensure steelmaking not only survives in the UK but thrives.”
The new strategy is aimed at increasing the domestic share of the UK steel market from the present 30% level to 50%.
It delivers as much as £2.5 billion via the National Wealth Fund to support green transition and overhaul the industry, with a shift to electric arc furnaces recycling scrap metal sources.
Additionally, it emphasises steel’s role in critical infrastructure defence and renewable energy projects.
Steps have also been taken to address concerns over energy costs, reducing electricity prices for industrial producers and rationalising electricity grid access.
Steel producers maintained however that, despite increases in compensation for electricity network charges, there were no new initiatives to deliver competitive industrial power prices.
Concerns continue too that carbon cost increases would render UK producers uncompetitive beyond EU markets.
However, there was praise from analysts RSM UK for efforts to level the playing field for domestic production against the threat of low cost bulk supplies from China in particular.
Under the new system, there will be a 60% reduction in the amount of steel that can be imported into the country tariff-free.
Previously, imports that exceeded this level were liable for 25% tariffs; this penalty will now double to 50%.
RSM UK director and industrials senior analyst at RSM UK, Emily Sawicz, commented that the UK produced less than 4million tonnes of steel annually, with imports meeting around 70% of domestic demand and the global market suffering from overcapacity.
Additionally, high electricity prices, uncertainty over the timing of the Carbon Border Adjustment Mechanism and uneven trading conditions had further eroded UK competitiveness.
Despite this, steel remained strategically vital, underpinning national security, major infrastructure and the energy transition, said Sawicz.
“If implemented effectively, the new measures could drive investment in lower-carbon capacity, reduce the cliff-edge risk from upcoming EU changes and takes a step forward toward a coherent steel strategy, with domestic use at the heart, to drive economic growth, she remarked.
“If we pair smarter trade protections with competitive energy and a clear pathway to green production, UK steel can grow market share and be part of the next wave of industrial investment.”
Pic: Maksim Gusev
