LONDON: On Monday, the British steel industry’s lobby group warned of an impending crisis due to soaring wholesale energy prices which could force plants into expensive shutdowns, stoke emissions and sow chaos through supply chains.
UK Steel argues that the government could help by providing a fixed amount of capacity at a competitive price or a virtual interconnector. Unless the government helps, “the consequences will be dire for our industry.” There is a shortage of natural gas in Europe that had sent prices for electricity and gas soaring, triggering sharp rises in the prices paid by people heating their homes or for major heavy industrial plants smelting steel.
UK Steel which lobbies on behalf of the British steel industry, said in a briefing document: “These extraordinary electricity prices are leading to smaller or wiped-out profits and this to less reinvestment,” “With winter approaching, demand for gas and electricity will rise, and prices could get higher, which will make it impossible to profitably make steel.”
Therefore, UK Steel called on the government to help. The business minister, Kwasi Kwarteng said the government was working out how to support energy intensive industries hit by soaring gas prices, saying it was a “critical situation.”