The future of steel on course to be a hot topic at the NASS annual golf event

There are a few key events in the steel industry calendar and the National Association of Steel Service Centres (NASS) Golf Day is one of them. Three years ago, Peel Ports Group first sponsored the event in the same year we opened our automated steel terminal to meet the rising demand for steel handling at the Port of Liverpool.

This demand continues today, and the Peel Ports offer has continued to evolve offering our steel handling services across the country through our ports in Sheerness, Glasgow and Great Yarmouth. Our customers now benefit from multi-port entry options, efficient haulage that comes with dealing with major port trade flows and the customer service, professionalism and focus on safety that is expected of a major, FTSE equivalent, UK company and the second largest port operator in the UK.

The membership of NASS is made up of our customers and our customer’s customer’s providing an opportunity to discuss our performance with cargo owners and receivers alike, ‘driving’ continuous improvements in what we do. NASS members include domestic and European manufacturers, UK stockholders, processors and suppliers to the industry from ports to credit insurers. The association campaigns on several topics pertinent to the UK steel industry from employee skills to energy costs highlighting, for example, competitive disadvantage in the UK compared to Germany and France where energy costs are 50% and 100% more expensive respectively*.

Topping the agenda currently is the level of uncertainty in the market across the sector from weakening automotive demand, the future of Tata Steel in the UK with the recent effective blocking of the ThyssenKrupp merger by the EU Competition Authority and the very sudden and saddening news of the British Steel insolvency. British Steel have cited the extended BREXIT saga as one of the key factors in bringing about the current situation. For the industry at large, it cannot be denied that this is one of the causal factors that is acting as a drag on the steel sector and the wider economy. Whilst exporting to Europe may be good on paper at the current exchange rates, the rising iron ore and input costs traded in dollars is a huge concern not to mention sentiment from European purchasers buying UK product. As if that wasn’t enough we have US 232 measures and European Steel Safeguarding.

What do we currently see as a result, other than the headlines above? Historically low European HRC pricing as a bellwether of the wider market, high stocks in the supply chain because of the uncertainty and sales dropping makes this a recipe for trade insurers to take a more cautious view of the sector according to NASS.

Steel imports as a share of UK demand has been on a continuous upwards trajectory since the early 1980’s, currently exceeding 60% of the market or 6.8 million tonnes in 2017**. Of this volume approximately 70% is European according to NASS. Of the total 11 million tonnes of demand 80% is supplied by UK stockholders and service centres. Lots of numbers but clearly the trends in the steel industry have a direct impact on NASS members and how they operate their businesses.

Looking across the supply chain given the history and outlook, UK Ports are a constant and increasingly being recognised as strategic partner and not just a means to an end. This changing industry view plays to the strengths of Peel Ports as one of the UK’s largest port operators and the only UK port group that demonstrates an ability to take an active role in the supply chain not simply relying on third party operators. Our port group handles 70-million tonnes of cargo annually across a wide range of commodities which includes over 750,000 tonnes of steel and metals.

There is lots to talk about at the ninth annual NASS Golf Day and Peel Ports are proud to continue to support this event and the wider industry.

To find out more on Peel Ports Steel & Metals handling please click HERE.

* UK Steel, New report: High power prices threatening industrial competitiveness Press Release, 5th December 2018.

** ISSB UK Demand: Steel Mill Products 1975 - 2017

 

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