Steel was once the beating heart of British industry, exporting to manufacturers far beyond our shores.
But that once proud sector has declined to such a degree that you could now fit the entire 海角视频 steel manufacturing workforce into the Cardiff City Stadium.
Go back to 1971 and you would see a steel industry in Britain that employed 323,000 people. Within ten years, that number had halved. By the end of the 1980s, it was below six figures and the national workforce now stands at roughly 32,000.
Granted, part of that shrinkage represents automation and efficiency.
But it also amounts to a staggeringly laissez-faire attitude towards decline – the sector’s output has dropped by 40% since the 1990s and as a country, our reliance on imports has deepened.
Some might suggest that this is an inevitable consequence of an economy maturing to post-industrial, service-based skills.
They would be wrong. It is at odds with the experience of our peers – of the United States, of France, of Germany – all of which have recognised some basic tenets of making metal.
That primary recognition is that steel is a cyclical global industry with periods of high demand, followed by contraction. At times of low demand, steel is dumped on the international markets, eroding the prices and profits of steelmakers in mature markets.
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Blast furnaces, which generate primary steel by baking iron ore at well over 1,000°C, are badly affected by these low points in the cycle because of their high fixed costs and exposure to raw material prices – to put it simply, you can’t easily or quickly switch off or turn down a blast furnace at tricky times.
Those low points in the cycle are becoming harsher because of global over-capacity, to a large degree driven by huge growth in China – where energy is state subsidised, environmental regulations are few and the cost of iron ore is low. This was a key reason given by Tata Steel in their recent job cuts announcement that could affect so many jobs.
This tough backdrop is the new (or not so new) normal of steelmaking. And we need a well thought through industrial strategy to adapt to it – rather than stumbling haplessly around seeking patch-and-mend financial measures to keep struggling steelworks alive.
Different countries have adopted different approaches. Germany, which long ago made an active political and social decision to support the steel industry, produces around 45 million tonnes of steel annually – well in excess of its domestic consumption of 30 million, through interventionist measures including a far more sophisticated approach towards apprenticeships and energy prices for intensive users.
The United States has an alternative approach, and one that holds promise for us. The US has opted for electric arc furnaces – which use electricity to melt down scrap and to revive it as fresh steel. They produce just a third of the emissions of blast furnaces and can be sustainably powered, using renewable energy sources such as hydro, wind, solar or nuclear to create genuinely green steel.
This would support the 海角视频’s goal of a net zero carbon economy by 2050 and help to sustain a strategic foundation industry.
This approach, already used at Liberty’s Rotherham steelworks, also takes advantage of something Britain has in abundance – scrap. As a nation, we cast aside ten million tons of scrap steel each year, most of which is exported with little value added. It’s a raw material we should harness.
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Britain has an opportunity to move quickly in this area, gaining a competitive advantage over other countries which remain highly reliant on blast furnaces.
Moving away from over-reliance on blast furnaces will involve some disruption. It will require substantial capital, both in equipment and in retraining people. But those steps will be genuine investments - worth it to move towards a genuinely sustainable industry.
What can the Government do? It could back this approach through reduced energy prices for the industry - ours are presently €65 per megawatt hour, compared to €43 in Germany and €31 in France, which makes it incredibly difficult for an industry consuming large amounts of electricity to be competitive.
Labour gets it and recognises the need for a thriving steel industry as part of its Green Industrial Revolution.
In its manifesto Labour committed to supporting our steel through public procurement, taking action on industrial energy prices, exempting new capital from business rates, investing in R&D, building three new steel recycling plants and upgrading existing production sites.
None of these steps are cost-free or pain-free. But those difficult steps will be taken through strategic choice – rather than through force majeure the next time a major steel operator ends up in the hands of the Official Receiver.
Strategy is about having a destination in mind.
We need to stop stumbling around in reaction to events and consider what a modern, viable steel industry might look like for post-Brexit, 21st century Britain.