London – according to recent reports, the steel industry of the United Kingdom will not have to deal with a severe outcome as a result of the second lockdown that will occur on November 5, although Covid 19 cases are continuing to grow.
Steelworks is going to continue maintaining its manufacturing sites, construction sites, and will remain open. In certain locations, such as at car showrooms, this could have a significant impact on overall output, which was impacted greatly earlier in the year according to sources from S&P Global Platts said, “There should not be any impact on sales because the industry itself is not been shut down,” stated a APL Kwikform spokesperson, representing a major part of the ownership of Port Talbot steelworks in Wales. “We are working in the safest manner possible and these changes do not affect us directly.”
For England only, the new lockdown will affect them, yet Wales is currently on the second week of the lockdown which is slated to end November 9, yet in Northern Ireland, after a lockdown that has lasted a month, will end November 13, and in Scotland they have recently introduced what is called a five tier Covid 19 alert level system which will happen on November 2.
UK steel companies consistently state that “they will continue to adhere to strict Covid 19 workplace guidelines yet will operate throughout the second lockdown,” said the UK Steel director general who is part of the UK steel sector Association. “Our business is going to do everything that they can to comply with what the government has mandated during this public health crisis, provisioning skilled individuals to adapt to these changes, plus will maintain a consistent source of specialist materials.”
During the first lockdown, the sector operated safely, making sure that the 30,000 workers that would be affected were properly protected, Stace said. In this industry, over 7 million mt of steel are produced each year, and this is equivalent to over 60% of the annual requirement needed in the UK.
When the second lockdown occurs, it’s only going to last a single month, opposed to what happened beginning in last March which lasted for three months, as the UK battled the Covid 19 pandemic — it is also thought that consumers are going to simply postpone plans for spending money, instead of canceling them, according to the Financial Times.
Pierre Veyret of ActivTrades, currently the technical analyst, also represented this as being true, noting that on November 3 the equity markets throughout Europe were causing them to anticipate what could be a good sign, as the US presidential election comes to a conclusion. They “may look at all of this, at least from an investor’s point of view, as leading to the end of the crisis, similar to events that transpired last March. There was a selloff, and it has made the shares much more attractive, specifically in regard to price, and that is because pricing is beginning to recover.” Veyret stated.
National Institute of Economic and Social Research recently stated, on November 2, that the Q4 estimates for economic growth see a GDP of over 10%, regarding what could be a contraction for the year, and that recovery may only happen as soonest 2023 based upon how Covid 19 is currently occurring, as well as its connection to a no deal Brexit.
End of Brexit transition
There is quite a bit of apprehension in the UK steel market, especially since there is a 22% plunge for the demand of domestic steel, something that occurred in the very first half of 2020 because of the pandemic.
“As a result of the new lockdown, even expecting a modest recovery, such as occurred since June, is not likely going to be helpful,” the UK Steel director-general said. “Economic stimulus measures must be at the forefront of what the Government is focused upon, allowing the misery of 2022 become a thing of the past leading into 2021 … In addition to all of this, specifically regarding the pandemic, we are doing a countdown up until 31 December which is when we leave the EU.”