Electricity Prices Crushing UK Steel Industry, Leaders Warn

CR:Reuters

In the industrial heartlands of Britain, where the percussive symphony of steel production once provided the soundtrack to economic prosperity, an ominous silence threatens. Industry titans are sounding the alarm: electricity prices have become an existential vise grip on UK steel manufacturing, squeezing profit margins until they gasp for financial oxygen.

“We’re paying nearly twice what our German competitors do for power,” explains Emma Reynolds, CEO of Sheffield Forgemasters. “It’s like running a race with ankle weights while everyone else wears track spikes.”

The numbers tell a sobering story. UK steel producers face electricity costs averaging £65 per megawatt-hour compared to £31 in Germany and £28 in France a disparity that transforms energy from operational necessity to competitive disadvantage.

This price gulf comes at a particularly precarious moment, as Asian imports flood global markets and post-Brexit trade dynamics remain unsettled. For the 32,000 directly employed in British steel and the 750,000 in related supply chains, economic theory is becoming uncomfortably personal.

Industry leaders propose targeted relief through industrial energy price caps and carbon border adjustment mechanisms to level the international playing field, warning that without intervention, Britain risks becoming a case study in deindustrialization where a nation that pioneered steelmaking during the Industrial Revolution watches its forges cool permanently.