UK steel makers hail energy probe by EC

Lower energy costs abroad are handing continental suppliers an unfair advantage over UK steel firms, the industry has claimed, as the European Commission (EC) prepares to launch a probe into price differences.

The EC has agreed to investigate energy costs under pressure from product makers, which have had to shoulder massive increases over the past year.

Corus said its electricity and natural gas costs increased by 40% in the first six months of this year, compared with the same time in 2004.

A spokeswoman told CJ: "We have raised concerns over energy price levels – they are a significant element of our costs. We look forward to the results of the investigation and hopefully a lowering of prices."

The latest pressure for action on spiralling costs came from the Metals Forum, headed by British Constructional Steelwork Associa-tion director general Derek Tordoff, which put the case to minister of state for trade and industry Alun Michael last month.

Tordoff said high UK prices give continental and non-EU producers an unfair advantage over their UK counterparts. He told CJ: "There’s a significant difference in energy prices between the UK and Europe, which is a major concern for metals. It’s not just that prices are going up, they are affecting UK competitiveness."

He added that the EC is well placed for the investigation as it will have access to data not available to the Department of Trade & Industry.

Wholesale energy costs in Germany are approximately 60% of those in the UK. Corus was quoted £50.60/MW beginning 1 October, compared with the German price of £30.40 beginning January 2006.

The Corus spokeswoman said the company is looking to recover input prices, whenever the market will allow.