We forecast a modest recovery in the UK steel industry over the coming years. In line with European counterparts, the UK metals industry has been rocked in recent years by low profitability that has led to capacity reductions and disinvestment. However, the worst is likely over for the UK, as slightly stronger domestic demand and recent investment from international firms such as SSI and TATA Steel should arrest the slide in sector fortunes.

We expect the UK autos industry to provide a much needed boost to domestic steel demand, as both vehicle demand and production continue to recover impressively. However, conditions for firms in the industry will remain challenging due to a combination of low output prices, high input costs, regulation and weak external demand for UK steel exports. Opportunities for local firms exist in servicing domestic manufacturing such as autos and demand for high end steel products in fast growing but lower technology emerging markets.

Click here to open the POPUP