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Highlights
- Lack of skilled labour and growing inflation have put Britain's steel industry in crisis.
- The UK steel industry has been shrinking fast and is losing skilled labour.
- The £ 2.4 billion UK steel industry produces 7.2 million tonnes of crude steel annually.
Lack of skilled labour and growing inflation seems to have put Britain's steel industry in crisis. UK's steel industry union Unite lamented the lack of support from the Rishi Sunak government. The trade union expressed its remarks that this lack of support from the government has posed a serious threat to the steel industry in the UK.
Steelmaking is a complex process which requires a lot of energy. Amid the growing energy prices, the cost incurred by steel firms has gone up. In fact, steel manufacturers in Britain spend about 60% more on electricity than their European counterparts.
But the silver lining amidst all this is the global manufacturing sector's recovery this year. Sharon Graham, Unite's general secretary, said that even though the government wants the UK steel industry to be more internationally competitive, there is no indication that it will be able to achieve its goal anytime soon. Contrarily, the UK steel industry has shrunk and is losing skilled labour.
Graham called for tougher measures to ensure more domestically produced steel was used in UK infrastructure. The £ 2.4 billion UK steel industry produces 7.2 million tonnes of crude steel annually - around 70% of the UK's annual requirement.
Among other factors affecting the sector besides the rising energy costs is the disparity between prices in Asia and Europe and rising interest rates threatening mortgage availability.
Amid all this, let's explore some of the steel stocks operating in the UK.
Anglo American PLC (Lon: AAL)
The FTSE-100 constituent was witnessing a rally of 3.59% at the time of the market opening on 20 March. As a producer of platinum group metals, premium quality iron ore and metallurgical coal, the Anglo American PLC was trading at GBX 2,598.50, boasting a market cap of £ 33,492.95 million. The AAL stock declined by -29.46% yearly and -19.70% YTD, respectively, with an EPS of 6.93.
BHP Group Limited (LON:BHP)
BHP Group Limited is another world-leading resource company focusing on iron ore and metallurgical coal production for steel making. On Monday, 20 March, the BHP stock was trading at GBX 2,386.00 and was up 1.21% at the time of opening. BHP had given its investors negative returns on a YTD basis of -7.20% and positive one-year returns of 3.55%, respectively. The BHP group enjoyed a market cap of £ 49,792.09 million and had a Turnover (on book) of £ £6,283,594.21.
