UK steelmakers are facing their weakest position versus European competitors in three years as electricity costs climb, according to new analysis by industry lobby group UK Steel. The report highlights a widening price gap with key EU rivals that the group says is eroding British firms' competitiveness.
UK Steel's analysis shows the premium paid by the British sector over French counterparts has risen to almost £30 per megawatt hour (MWh), the highest level recorded since 2023. The figure underlines a growing cost differential between the UK and some continental producers that rely on lower electricity prices for energy-intensive processes such as steelmaking.
The lobby group attributes the upward pressure on power prices to a recent surge in global gas costs, which it links to the US-Israeli war on Iran. Because electricity prices in many markets are closely connected to gas markets, the disruption and higher gas prices have translated into increased power bills for manufacturers in the UK.
UK Steel's findings suggest the industry could face tougher conditions when bidding for contracts and competing with EU producers on price. The analysis signals a potential drag on margins and investment decisions for British plants at a time when energy costs remain a central concern for heavy industry across Europe.
The report does not prescribe specific policy measures, but its publication is likely to feed into ongoing debates among business groups and policymakers about energy costs, industrial competitiveness and what steps might be necessary to support energy-intensive sectors in the face of volatile global gas markets.