New Micro Mill Could Bolster UK Reinforcement Supply Chain
BIRFA (the British Independent Reinforcement Fabricators Association) believes that a new micro mill, dedicated to the production of reinforcement bar and coil, could be the solution to a supply gap looming over the UK in the next decade.
A recent government report, Future Capacities and Capabilities of the UK Steel Industry, published by the Department for Business, Energy and Industrial Strategy (BEIS), shows an increasing gap between UK production capacity and UK demand, for steel long products generally, and reinforcing steel in particular. The report forecasts UK reinforcing steel demand to increase by 2.6% year on year through to 2030.
Reinforcing steel imports have been running at around 50% of the reinforcing steel market for some years, one of the highest figures for any domestically produced steel product. Further imports cannot be relied on to fill the forecast gap, particularly when major potential suppliers like China have been excluded from the market. In 2017, even the UK reinforcement mill supplemented its production with imported billets, for the first time since 2014.
The potential to get more out of the UK’s existing capacity is very limited, and the idea of resurrecting mothballed capacity seems inconsistent with a forward looking industry. The industry deserves 21st century technology, with the lower manufacturing costs, higher quality and greater sustainability, that this would offer.
BIRFA’s proposal is to expand UK production by building a new, state of the art, micro mill. Such a mill would have a capacity of between 300 and 500 kt, dedicated solely to the production of reinforcing steel for the UK and Irish markets. One such mill has been operating for almost a decade in the USA, and has been so successful that a further two are under construction there. A micro mill would depend on the plentiful supply of good local scrap, and have much reduced energy consumption compared to a conventional mini-mill.
Investment costs for a micro mill are relatively low compared to conventional mini-mill manufacturing. With space and energy requirements much reduced, and with shorter construction and start-up times there is the opportunity for an attractive return on the investment.
There has been little significant investment in UK steel manufacturing for some time and this would seem an ideal opportunity to turn the tide.