The current mess concerning the future of the Scunthorpe steelworks in North Lincolnshire prompts the exasperated question in the title to this article.
Thanks for a very interesting article. I wasn't quite sure, do you think that Scunthorpe should be just allowed to close? I'm not expressing an opinion I'm just interested to know.
I would frame the issue differently. I think that it is completely inevitable that the blast furnaces will close in the medium term. Once you accept that the question is when.
Is the right thing to do to close them quickly, saving the money that would be spent on keep the plant going and using it to promote alternative employment? This approach would be almost impossible now, but it might give the best long run outcome if implemented wholeheartedly.
The alternative would to close the blast furnaces in 2028 (when the Port Talbot project is completed) and after that decide whether to build a new electric arc furnace. The cost will be high and it would only make sense if there was a decision to stop all of the Net Zero nonsense.
No longer. That was the case when electric arc furnaces first came into widespread use. However, it is now standard to use direct reduction iron (DRI) or sponge iron if you want to produce high quality steel from electric arc furnaces. It may not match the very highest quality steels produced in blast furnaces, but it is good enough in most application if suitable iron ore is used.
The usual route to DRI is by using natural gas as the reduction agent, but all of the fuss about green steel is based on using hydrogen produced by electrolysis as the reduction agent. Current proposals for green steel have really high costs, so it is necessary to assume that there is a large market for premium, low carbon, steel. Maybe for luxury cars, but not for construction - your next bridge is not going to be built with green steel.
Very interesting - thank you Gordon! When I read "Politicians and other policymakers want to be liked and respected" it reminded me of a TV documentary on Margaret Thatcher, made after her death, which included her formidable press secretary Bernard Ingham, who said: "She didn't want to be loved. God spare me from politicians who want to be loved".
Steel seems to excite politicians' emotions: Chairman Mao decreed that in the Great Leap Forward, even small communities would make steel, resulting in no useful steel and the starvation of tens of millions of Chinese as the fields were neglected.
Do we know if the large expenditures in India, cited in [3] are based on an expectation of commercial profit, or taxpayer subsidy?
As you show, it will take a brave soul indeed to remove government and attendant lobbying from our lives. Such radical shifts usually require a crisis, so when do we wake up to the reality that we're in one?
Mrs T was very rare as a politician. Most of them are profoundly insecure and rely on approbation to put up with the stresses of the job. In addition, I don't think that Mrs T was as immune to criticism as Ingham implied, though I can fully understand the second sentence in the quote.
As far as I am aware the large investments in India are unsubsidised - to the extent that is possible in any complicated tax and political system. There is a huge and growing market for steel in India - similar to China 40 years ago - so the projects are not based on serving export markets, though those may exist in the Middle East and Africa.
Thanks for a very interesting article. I wasn't quite sure, do you think that Scunthorpe should be just allowed to close? I'm not expressing an opinion I'm just interested to know.
I would frame the issue differently. I think that it is completely inevitable that the blast furnaces will close in the medium term. Once you accept that the question is when.
Is the right thing to do to close them quickly, saving the money that would be spent on keep the plant going and using it to promote alternative employment? This approach would be almost impossible now, but it might give the best long run outcome if implemented wholeheartedly.
The alternative would to close the blast furnaces in 2028 (when the Port Talbot project is completed) and after that decide whether to build a new electric arc furnace. The cost will be high and it would only make sense if there was a decision to stop all of the Net Zero nonsense.
I was under the impression that electric arc furnaces could only process recycled steel which would be of low quality. Is that correct?
No longer. That was the case when electric arc furnaces first came into widespread use. However, it is now standard to use direct reduction iron (DRI) or sponge iron if you want to produce high quality steel from electric arc furnaces. It may not match the very highest quality steels produced in blast furnaces, but it is good enough in most application if suitable iron ore is used.
The usual route to DRI is by using natural gas as the reduction agent, but all of the fuss about green steel is based on using hydrogen produced by electrolysis as the reduction agent. Current proposals for green steel have really high costs, so it is necessary to assume that there is a large market for premium, low carbon, steel. Maybe for luxury cars, but not for construction - your next bridge is not going to be built with green steel.
Fascinating article as usual - should be compulsory reading for any politician involved
in deciding Scunthorpe’s fate.
Very interesting - thank you Gordon! When I read "Politicians and other policymakers want to be liked and respected" it reminded me of a TV documentary on Margaret Thatcher, made after her death, which included her formidable press secretary Bernard Ingham, who said: "She didn't want to be loved. God spare me from politicians who want to be loved".
Steel seems to excite politicians' emotions: Chairman Mao decreed that in the Great Leap Forward, even small communities would make steel, resulting in no useful steel and the starvation of tens of millions of Chinese as the fields were neglected.
Do we know if the large expenditures in India, cited in [3] are based on an expectation of commercial profit, or taxpayer subsidy?
As you show, it will take a brave soul indeed to remove government and attendant lobbying from our lives. Such radical shifts usually require a crisis, so when do we wake up to the reality that we're in one?
Mrs T was very rare as a politician. Most of them are profoundly insecure and rely on approbation to put up with the stresses of the job. In addition, I don't think that Mrs T was as immune to criticism as Ingham implied, though I can fully understand the second sentence in the quote.
As far as I am aware the large investments in India are unsubsidised - to the extent that is possible in any complicated tax and political system. There is a huge and growing market for steel in India - similar to China 40 years ago - so the projects are not based on serving export markets, though those may exist in the Middle East and Africa.
Thank you.