Rising energy prices, the impact of life after the EU and labour shortages remain the main challenges facing the UK metals sector according to a new report.
Nearly a quarter of companies in the UK Metals Council’s State of the Metals Industry in the UK 2023/24 survey admitted to adjusting supply chain strategies or sourcing alternatives, whilst just under a third want enhanced government support to navigate trade barriers and custom procedures in the wake of Brexit.
A total of 22 per cent of manufacturers are also looking for improved energy supply contracts to bring prices down to more affordable levels, with just 31 per cent of businesses saying that they have an effective recruitment strategy in place for filling the well-documented labour gaps.
There were positive sentiments in the report, which was officially published during the opening address at the UK Metals Expo in Birmingham on 13th September.
Despite the widespread challenges, 70 per cent of respondents are optimistic or very optimistic about future business prospects, underlining the resilience of the sector and its ability to innovate.
“We touch metals every day, whether that is in our homes, in the cars, planes and trains we travel in, the medical devices we rely on, as well as tools and machinery used for their production,” explained Rachel Eade MBE, chair of the UK Metals Council.
“Importantly, it is now recognised that metals can be infinitely and readily recycled into new parts, something that cannot be said for many other materials in modern life – we need to value metals more as we move to a net zero economy.
“Foundation industries will continue to play a critical role in the way we all live, and this vital sector needs a voice to ensure that the government understands the journey we are on.
“This is why we came up with the State of the Metals Industry in the UK report, in conjunction with the team from the UK Metals Expo. It’s a unique opportunity for us to canvas the views of primes, metal producers and those in the downward supply chain.
“The issues the industry is facing span from supply chain disruption because of Brexit to availability of raw materials and how they can mitigate the cost of energy – a key issue when you consider levels of consumption in our industry.
“Skills and the ability to get new people into our sector is also a challenge that is holding many of them back as they look to support the UK’s desire to move towards net zero. We’ll also be highlighting this to government at the UK Metals Expo.”
A level playing field?
Energy prices at Andover-based MRT Castings have trebled over the last eighteen months.
The company exports over 60 per cent of its £8.5m annual sales and the massive rise in costs makes trading overseas more difficult – especially when other countries aren’t hit with the same extortionate rises and delivery charges.
“We can’t pass all the increases on to our customers, so there is little doubt our global competitiveness has been hit,” says managing director Phil Rawnson.
“Whilst we have a continual focus on becoming more energy efficient as we drive towards net zero, we could certainly do with a more simplified support offer from government.
“At the last count, there are 26 different support packages to help the move towards decarbonisation, but as an SME we don’t have the time or resources to uncover which corner of Whitehall they’re buried in.
“Bureaucracy is too heavy and costly, and this is definitely a barrier for firms to tap into the financial assistance that is out there.”
Brexit has also been a major issue for MRT Castings, which invested in one of the UK’s newest foundries in 2020.
Shipments to one of the company’s largest customers in Ireland used to take less than 24 hours, now thanks to an elongated and costly customs process, the same journey is taking between three to five days.
Rawnson added: “Our sector is extremely resilient, and we can achieve amazing things when we work together. Just look at what we did during the Covid-pandemic when we trebled our output – with the help of our supply chain – to support the ventilator effort that saved hundreds of lives.
“We don’t want handouts, just a level playing field.”
About the UK Metals Council
The UK Metals Council is made up of twelve trade associations from across the full spectrum of the metals supply chain, from primary manufacturing to recycling.
In total, it represents the interests and views of over eleven thousand companies, employing directly and indirectly nearly one million people.
This first ever State of the Metals Industry in the UK report was produced to provide a sector snapshot of the opportunities and challenges faced by the domestic metals industry and the prospects for future growth and sustainability.
It is now available, and all the findings will be sent to the UK government to help it shape future policy and support, whilst the data will also be available for sector specialists, companies and academia to use for intelligence gathering, bids and lobbying.
Lord Rupert Redesdale, chair of the UK Metals Expo noted: “The UK Metals Expo is the perfect platform for launching the report, with more than two hundred exhibitors and four thousand industry professionals attending from 52 different countries.
“The themes at the UK Metals Expo align seamlessly with the UK’s net zero ambitions, depending as this does on advanced materials, manufacturing excellence and engineering innovation. A robust domestic metals supply chain is pivotal in realising our objectives, whilst driving energy-efficient production, nurturing circular economy practices, and propelling sustainable advancement.”
Contact: UK Metals Council, www.ukmetalscouncil.org
MAIN IMAGE SOURCE: UK METALS COUNCIL