British Steel: 50-fold increase in power prices limiting daily operations
The UK’s second-biggest steel producer said rising power prices had made it impossible to produce profitably at certain times of day.
British Steel said there had been an up to 50-fold increase in quoted rates, with a maximum price at peak times of up to £2,500 per megawatt hour, compared with an average rate of £50/MWh in April, according to The Financial Times.
Industry body UK Steel said some producers had halted their operations for limited periods at peak times because of the rocketing electricity costs.
British Steel, which is owned by Chinese industrial conglomerate Jingye, said it was now being quoted a maximum price at peak times of “up to £2,500” per megawatt hour, compared with an average rate of £50/MWh in April.
The company said it was maintaining production at normal levels but warned prices were “spiralling out of control”.
It called on ministers and energy regulator Ofgem, to level the playing field with European competitors.
“We were already at a major disadvantage to many of our European competitors, who pay much less for their power, and these exponential rises are widening the gulf — particularly as the increases have been sharper in the UK than in many other parts of Europe,” British Steel said.
“Wholesale prices in the UK have quadrupled, meaning that even in a global market where steel prices are strong, it is now uneconomical to make steel at certain times in the UK,” Gareth Stace, director-general of UK Steel, said.