Let us be clear about one thing: steel blast furnaces are in terminal run-off across the world. The US has not built one since 1964. It had 125 in the mid-1970s. Twelve are left today.
My saying was that no one is ever going to build another blast furnace in a rich country ever again.
No, not China, foreign competition. It’s that there’s so much scrap steel – we use less steel in anything we make these days – that recycling is the way to go in volume. This is why Nucor – whih hsa never run a blast furnace – hsa come from nothing to 50% or whatever it is of the US market. The decline of “the steel industry” is really the decline of blast furnaces and that’s a technological move, not a trade or foreign competition one.
40 years ago, when I was an academic, a colleague of mine was asked by the Thatcher administration to look at the future of the steel industry in the UK. In summary, his report said there are actually three steel industries – primary production, secondary production and specialist steels. The first is labour intensive so had no hope in a high labour cost country like the UK and should be discouraged, the second was going to become increasingly important for supply and should be encouraged, and the third was strategically important and highly profitable and could look after itself.
Here we are 40 years later and some people still want primary steel production to be maintained and subsidised for just for 2,500 jobs. Less than 0.01% of the work force.
Yes. You are right. The UK has 30 tonnes of steel for every person. Recycling is the way..
Jb
I keep mine in the cupboard under the stairs.
Does this mean that the closure of blast furnaces in Scunthorpe and Port Talbot is not the national security disaster it is being portrayed as in the press?
(With due apologies to the thousands losing their jobs).
Over 40 years ago (eek!!!) when I was in primary school in Sheffield we were taught about the steel industry as it was our local history. As a 10-year-old I could draw you a basic diagram of a smelting system and describe the basic processes, that to make carbon steel you have to *remove* all the carbon first so that you can carefully add back carefully measured amounts, how you use limestone as a flux (yes, *melting* limestone slightly boggled our child minds).
And back then as 9/10-year-olds we knew fully well that primary production was a dying industry and recycling and specialist steels was the future …. and had been since about 1900! In 1979 to us this was already just history. We visited “working museums” of primary production to see “what used to be done”.
Its all fine until you need a lot of steel and China won’t sell it to you, because you’re at war with them.
Why is it that economists seem to ignore history? And assume that there will never be another global scale conflict? That one day we might not be able to get everything from ‘abroad’?
Economists constantly extrapolate from ‘A little bit of X is good’ to ‘100% X will be brilliant!’. One assumes they all stick a kilo of salt in their saucepan of spuds.
In that unwise and thankfully remote scenario the country would grind to a halt from the lack of pretty much everything from painkillers to rechargeable batteries long before steel became a factor.
It was either Nationwide or Panorama in the mid 1970s that had a clock ticking showing how much British Steel was losing per second.
It was on its way out when it was nationalised, once we stopped making tanks. ( Slight exaggeration, but its decline mirroed that of the Britush auto and shipbuilding industries )
Steel production in jgh’s sense was explained t.o us in our first year at srcondary school.
There’s an excellent book called ‘Junkyard Planet’ by Adam Minter which examines in detail the flows and currents of scrap metal around the world – most-specifically, steel and copper – and explains why, in just a few years, primary extraction and production of these metals will slow to a trickle of what it has been in the past – because reduction and recycling has come so far that there’s not much call to dig any more out of the ground.
It’s a bit long in the tooth now, but it’s a really good read that throws a lot of light on how this trade really works. In some ways, it’s a triumph of globalization and free markets, that it now makes more sense to ship a pile of failed Christmas tree lights halfway around the world to extract the copper and resmelt it, than it does to dig up and smelt virgin ore 100 miles away.
@Jim – you don’t need to worry about the Chinese not selling you steel. The Chinese commodity steel industry is entirely dependent on imports of foreign scrap metal. I’d be much-more concerned about the Swedes deciding to cut off supplies of high-tensile and specialty steels than I would about losing a Chinese source of A36 rebar.
llater,
llamas
@Ottokring
It was either Nationwide or Panorama in the mid 1970s that had a clock ticking showing how much British Steel was losing per second
Nationwide from late 1960s. They did same for BA, BL, GPO (BT), BR etc
I was at primary school at start and found it insane and thought they should be shut down or sold. Capitalist from birth
Made a lot at Uni when BT etc privatised. For BT borrowed money (M&S interest free loophole) to buy shares. Also used names of brother, mother and gf too. They thought I was mad, more fool them. Bought myself a gold & ss Rolex datejust and a Burberry in final year knowing they’d impress job interviewers
On day share allocations announced for one, I went into bank (RBS HQ) in rain sodden biker gear, long hair. Woman in front being told she can’t sell until YY share certificate received
My turn: “I want to sell xxxx YY shares” – enough to pay back M&S and have a good bank balance
Chap: “Certainly Mr Pcar”
Woman walked away mumbling profanities
And Finally…
Have a Laugh
Jim,
“Why is it that economists seem to ignore history? And assume that there will never be another global scale conflict? That one day we might not be able to get everything from ‘abroad’?”
Not an economist, but there is no sign of this on any reasonable horizon. No Adolf re-arming, no Napoleon. And even Adolf had a profitable reason to want to invade the East, back when agricultural land was a lot more valuable. Outside of oil states and utter shitholes like Sudan and Afghanistan, who cares about land in 2024? Is Putin going to launch nukes at all the people who buy his oil and gas? Are China going to get belligerent and make everyone who buys laptops and EVs elsewhere nervous about supporting them?
The next “global scale conflict” isn’t going to be decided by submarines blockading the North Atlantic trade routes.