Editorial comment
A steely focus is needed
This March, the UK government announced a six year plan for roads, rail and national infrastructure, following the release of the new national budget from Her Majesty’s treasury. The ‘National Infrastructure Delivery Plan for 2016 - 2021’ stated that Tata would be providing British steel for the Maersk Culzean gas pipeline, to be laid under the North Sea. The government claimed that some 18 000 t of steel from a Welsh steel facility would be used in the pipeline project, which sits 200 km off the coast of Aberdeen and is the largest UK gas field to be sanctioned for a quarter of a century.
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But hang on a minute, days later it emerged that Indian conglomerate Tata Steel Group was intending to sell off its entire UK steelmaking operation due to financial losses. The Welsh steelworks in question, situated at Port Talbot, were up for sale, and it is most likely the government knew of these plans before announcing the infrastructure deal. It’s expected that some 40 000 workers for Tata and its suppliers will be affected if the closures go ahead.
Now that the Tata news is made public, the government is keen to find a buyer for the operation and is offering to take a 25% equity stake as part of a support package for a potential purchaser. The deal, described by Business Secretary Sajid Javid, is offered as a business strategy and not as a means of bailout or as a nationalisation scheme. Speaking to the press, Javid said: “It will all be compatible with state aid … government can provide financing as long as it’s on commercial terms.”1
The industry has been suffering amidst low world steel prices, strong competition and over-capacity.
In crisis meetings in April, Javid met world leaders from the main steel-producing nations in Brussels and discussed the problem of over-capacity. China’s co-operation is being sought in particular, as (cheap) steel output from the nation continues to rise, despite its promises to curb capacity.
Whether or not British steel will be used for the Maersk Culzean pipeline project, or any other pipeline project in the near future, Tata’s Port Talbot site has been busy breaking production records, with the hot rolling mill producing more than 3.2 million t of steel coil up until the end of March last year, which is 165 000 t more than previous highs. Directors credit the boost in productivity to technological improvements (including new motors for the roughing mill) and an uptick in the pace at which projects are carried out. These sorts of efficiencies, it is claimed, can go some way to overcoming global cost disadvantages in the market.
A high-tech transformation of the sector has certainly been called for, as analysts urge the importance of keeping the UK’s steel sector alive.
This month’s issue of World Pipelines features two articles on pipeline steels. In the first, DNV GL writes about the growing importance of standardisation and industry collaboration: the DNV GL pipeline committee meets twice a year to discuss the advancement of global steel standards and to encourage the formation of joint industry projects and the development of recommended practices. The approach challenges over-conservatism and promotes flexibility, creativity in design and that high-tech edge that’s seen as the future of the sector.
In the second article, Berg EUROPIPE describes developing line pipe for sour environments in co-operation with pre-material fabricators, working at the edge of design limits such as wall thickness and pipe diameter.
Both pieces advocate companies taking a forward thinking approach to the modern problems of an age-old industry. Likewise, with next generation steel so vital to the British, and global, economy, it looks like governments are now prepared to review the measures they must take to save plants and facilities, and to implement long-term remedial action.
1. http://uk.reuters.com/article/us-tata-steel-britain-idUKKCN0XL0IY
