The British Metals Recycling Association has warned that tens of thousands of jobs and billions in economic activity could be endangered by potential steel export restrictions.
A new report from researchers at Sheffield Hallam University, commissioned by the British Metals Recycling Association (BMRA), has found that restrictions on British scrap steel exports risk collapsing the UK metals recycling industry.
The report explores the economic impact on the UK scrap steel sector as the steel industry transitions to low-carbon electric arc furnaces (EAF), which the BMRA says is set to significantly increase domestic demand for British scrap steel.
It found that an export ban to non-OECD countries would lead to nearly £5bn being lost in GVA (gross value added) and the loss of over 20,000 direct and indirect jobs.
Unlike traditional blast furnaces, EAFs’ material mix can consist of 100% scrap steel, prompting forecasts of increased demand. To ostensibly ensure supply can meet demand, the steel industry has been advocating for restricting British scrap steel exports.
These findings demonstrate that restricting recycled metal exports is not a viable solution.
However, the report states that even if every single steel furnace open today transitioned to an EAF – as is planned by 2050 – and only used scrap steel as its feedstock, over a third of all UK scrap steel would still need to be exported.
Commenting on the report, James Kelly, CEO of the BMRA, said restricting exports would ‘erode the fundamental economics’ that sustain the sector in a globally competitive environment.
“Exports are the lifeblood of the UK metals recycling industry and global demand for recycled steel is set to rise dramatically,” Kelly said. “These findings demonstrate that restricting recycled metal exports is not a viable solution.”
The report also models what impact export bans would have in various policy scenarios. For example, an export ban to Türkiye, the UK’s largest recycled metals export destination, would result in over £2bn loss of GVA and more than 6,800 jobs.
Will Eadson, Professor of Urban and Regional Studies at Sheffield Hallam University, said: “UK steel is a sensitive market, and our research shows how even modest policy changes to protect domestic recycled steel can have substantial and lasting economic effects.
“Our economic models demonstrate why careful thought must be given to any measures which seek to restrict overseas trade – we can see clearly how quotas and bans may lower exports, but at a cost to the overall value of the sector.”