Victorian philosopher Thomas Carlyle referred to economics as ‘the dismal science’. It’s a moniker that has haunted this particular field of study for well over a century and often, not without good reason. The sheer complexity and interconnectivity of the global economy means that during a crash or recession, every major industry feels the effects of each economic decision made by governments and financial institutions. This is particularly true of the British steel industry who, since the financial crash of 2008, have experienced a series of serious setbacks that continue to depress the industry.
Bott’s business relies upon high quality steel and building successful, lasting trade agreements with steel manufacturers. Our products, from van racking to drawer cabinets, require a high grade mild steel that can be reliably and efficiently shaped by our machines and above all, forms the base of a product that’s light, strong, and exceptionally reliable.
Bott processed 4000 tonnes of steel in 2015 and expect to process at least 4500 tonnes by the end of 2016. Traditionally, Bott has sourced around 80% of its steel from Tata UK, who provide the CA200 mild steel we use to create our products. We’re proud of the relationship we’ve built with the UK steel industry and how instrumental their high quality product has been to the success of Bott as a company.
Unfortunately, the future is looking increasingly uncertain, as the UK steel industry continues to struggle in a volatile and extremely competitive market. Since 2008, Chinese steel imports have continued to flood the global market, driving down world steel prices and forcing domestic manufacturers out through sheer volume of product. To put a rough figure on the current disparity, it’s estimated that China produces 822 million tonnes of steel annually, compared to the UK’s 12 million. It’s now reached a point where Tata UK are planning to close down their British manufacturing operation, putting thousands of jobs at risk and leaving a sizeable hole in the UK steel supply chain.
This creates a twofold problem for Bott. Firstly, the threat of losing a big player like Tata in the domestic market has resulted in companies that rely on steel ‘panic buying’ stock, creating a spike in demand and inflated prices, which in turn puts pressure on Bott to pay higher rates for a diminishing supply of quality steel. Secondly, and arguably more importantly, if Tata does sell their UK plants, they will likely sell them to a company who will turn them into scrap processing plants. These scrap plants cannot produce mild steel of the quality required by Bott’s products, which forces the company into sourcing steel of a high enough quality from other manufacturers around the world.
There is no simple solution for the steel industry in the UK. Many of the difficulties it faces are symptomatic of problems on a global scale, particularly the over-reliance on imports from China and the long term, chronic overproduction of steel worldwide. Unfortunately, there is very little the UK government can do right now to protect the domestic industry, as many of the import and production laws are made and upheld by the EU.
At Bott, we will continue to source and use mild steel of the highest quality, whether that can be found domestically, or imported from Europe and beyond. Because of the quality of the materials we use and the efficient, durable designs of every piece we make, we expect our products to last longer and perform better. This has a dramatic effect on our recycling targets and our resource efficiency in the long term, and it begins with the quality of our raw materials. As long as the British steel industry can continue to meet Bott’s requirements on price and quality, we are proud to design and manufacture our products with high quality, British steel.SHARE: