Following the crisis of prices in the international market falling coupled with increased costs at home the UK steel industry is now set to see a time of growth and a general positive outlook as these issues subside.
The global abundance of steel production seen in recent years continues, however this is beginning to ease due to several key factors which all lead to a positive future for UK steel.
- The global economy is growing
- China have cut production by closing inefficient mills
According to the head of the mission of the People’s Republic of China to the European Union, China has already cut steel capacity by over 115 million tons since 2016 and eliminated an additional 140 million tons of substandard steel capacity.
UK steel companies have become more competitive with the global industry, in part due to the lower sterling exchange rate following the EU referendum. Also UK steel producers are now much leaner, having cut costs in recent years.
A recent government report identified “enormous potential” for the UK steel industry if it can meet growing domestic demand. The study predicts that UK demand for steel is set to rise to 11m tonnes a year by 2030, presenting the industry with a £3.8bn a year growth opportunity.
The above is compounded by the fact that the HM Government released Construction 2025 in 2013 which outlines the need to lower construction costs by 33% and reduce project completion time by 50%. It is heavily suggested that this can be achieved through the usage of BIM (Building Information Modelling) and MRP (Material Resource Planning) software solutions. This is because of the time and cost savings they can provide via a multitude of features.
For example STRUMIS material nesting can create a 2% saving on steel expenditure, or more. A company fabricating 50 tonnes of steel per week could have a saving of £36,400 each year.
All of the above would suggest that now is the time to invest in more efficient and effective methods of working in order to benefit from the predicted market growth.
For further information on the many time and cost saving benefits BIM and MRP software solutions provide please visit www.strumis.com