26 April, 2021 #Business

The UK Steel Industry Faces Fewer Issues due to the Covid-19 Pandemic

With the start of the new lockdown coming on November 5th, the steel industry within the UK can expect to suffer a lot less. As the second lockdown comes from the soar in more new Covid cases, steelworks will continue to function in the UK as usual. All of this comes because the manufacturing and construction industry continues to boom.

However, the first hard-hitting industry to be affected is that of car showrooms. According to S&P Global Platts, the automotive industry is hardest hit and drastically affected. However, since the industry hasn’t been shut down, then there should be no direct impacts on sales. This comes straight from the mouth of Europe’s top steelworks, located in Wales.

He went on to further state that the industry isn’t affected. For the most part, they are continuing operations in a very safe and effective manner. With that said, the lockdown is scheduled for England only since Wales has already entered a lockdown that is due to end in November. Scotland introduced a special 5-tier alert for COVID-19 on the 2nd of November while Northern Ireland scheduled its lockdown for the 9th of November.

Hopes for Steel Industry

As long as UK companies adhere to the strict rules put in place, the steel industry shouldn’t be affected. Even with the second lockdown in place, there are thorough guidelines that need to be followed. As of March, the industry stands strong as it gears up to do everything it can to provide support for the local Government.

As such, the public health crisis stands a better chance of being tackled. Even if skilled persons are needed, the industry is ready to supply as much as it can to meet the demands of special materials. All of this comes after the industry successfully supported all of its 30,000 workers during the first lockdown. The industry needs to continue down this path to meet the demand for steel, and products like mobile aluminium scaffold, that increases with each passing year.

With the start of the second lockdown coming soon, all consumers are expected to suspend plans once again. This idea comes from an interesting analytical post that comes from the Financial Times. A London based broker also echoed similar sentiments. However, this comes due to the rebound that was expected to come from the equity market based on the US Presidential election.

They went on to suggest that investors patiently waited for special signs that were already coming because of the first lockdown. As such, all of Europe is now patiently waiting for the end of the pandemic or rather the associated crisis. However, the selloff made the market even more attractive for recovery prices.

In light of this, the National Institute of Research in the Economic and Social Department still went ahead and revised its Q4 estimates. As a result, there is now a 10.5% increases in GDP contraction. However, recovery levels that amounted to those of 2019 were only seen in 2023 due to the impacts of COVID-19.

End of Brexit Transition

With that said, the sector still remains in a predicament. The industry has also seen a 22% plunge in demand for domestic steel. The plunge comes from the first half of 2020 because of the devastating pandemic.

As a new lockdown comes, some fear that the long-awaited recovery that they had hoped for will only go into reverse. This simply means that the government will need to weigh the stimulus measures. The industry is in need of a boost in 2021 to provide support for businesses. If you’re like us, we’re just counting down until we can leave the EU.