Monday, 20 August 2018 08:43

Fastest growing markets for UK iron and steel exports now outside Europe

Written by
Rate this item
(0 votes)

New research, commissioned by Wyelands Bank, reveals Pakistan, Turkey and India are the UK’s fastest growing export partners for iron and steel. Exports to these markets are expected to grow by 5.9%, 1.4% and 0.9% respectively in the years to 2021.

Iron and steel exports to these three markets were worth $1.4bn in 2017 and the projected growth could generate an extra $29m a year for the industry’s exports.  

2018 08 20 104323

Alongside Turkey being one of the fastest growing markets, it is now the UK’s largest export market for iron and steel exports.  Iron and steel exports to Turkey have increased by 14% in the last ten years.  Exports to Turkey were worth $815m in 2017, some £100m more than in 2007 when exports to Turkey were worth $715m.

Turkey has become an export partner for the UK, partly because of its infrastructure development fuelled by its economic growth, and partly because the country is a staging post between Europe and the Middle East and Russia.  Turkey itself provides highly technical drilling and extraction equipment into the Middle East and North Africa region and is dependent increasingly on imports from countries like the UK.

The remaining largest markets are the USA ($682m), Germany ($475m), previously the UK’s largest market, Spain ($434m), and France ($384m), making up the remaining top five export markets.  India is the UK’s sixth largest market, while Sweden ($328m), Ireland ($294m), the Netherlands ($255m), and Pakistan ($246m) make up the remaining markets in the top ten.     

Meanwhile, iron and steel exports to Germany have decreased by two thirds over the period from $1.5bn to $475m.  The pattern is similar for Spain and France where exports have declined by $666m and $591m respectively over the ten years from 2007 to 2017.

The decline in exports to Europe can be accounted for by depressed growth in the region until the last two years, but also in terms of a shift in consumption in Europe away from UK manufactured iron and steel.  This is reflected in the rates of growth in the UK’s top export destinations.

Iain Hunter, CEO of Wyelands Bank, said: “Metals exports are at the heart of manufacturing production globally. The iron and steel sector in particular is vital in producing components for all industries, as well as consumer goods.  We can see how the UK’s largest export markets are changing as countries and their economies develop over time.”  

Wyelands Bank, set up to help businesses trade, grow and create jobs, commissioned the research to better understand the role of imports and exports in the UK economy.  It was prepared in collaboration with Global Trade Review, the leading trade and trade finance media company, and Coriolis Technologies, the trade data company, which has provided the data.

The wider metals sector

The UK metals industry as a whole accounted for 4.4% of total UK exports in 2017.  There are 21,610 companies in the sector as a whole which employed 609,499 people in 2017 and had a total turnover of £119.7bn.

Some 17,617, or more than 80%, of companies in the metals sector are SMEs.  The largest ten companies account for 55% of turnover and 44% of jobs in the industry.

Iain Hunter, CEO of Wyelands Bank, continued: “We can see how important SMEs are to UK trade, given the significant contribution (80%) make to this metals sector.  SMEs are often ambitious and entrepreneurial.  In addition, they are an important source of innovation. Smaller companies – especially in manufacturing – play an important role in the UK’s capacity to form part of global supply chains, as these metals businesses demonstrate.”

The UK base metals sector as a whole had a trade deficit of $6.4bn in 2017.  Imports were worth $24.4bn and exports $18bn.  The deficit has more than doubled since 2010 when it was $2.7bn. 

Iron and steel is the largest metals sector within the UK, closely followed by iron and steel products, which is higher up the value chain. The UK had a moderate trade surplus in iron and steel products in 2017, reflecting the higher end of the value chain that the UK’s sector operates in. Imports of iron and steel products were US$5.1bn and exports were US$5.4bn. Imports of aluminium are nearly twice as high as exports at US$4.7bn compared to US$2.6bn respectively.

The UK is one of the most open economies

Trade accounts for 58% of UK GDP; in 2016, the UK exported goods worth US$433.5bn and imported goods worth US$678.1bn. This makes the UK economy one of the most open in the G20, and is more than China, America and Japan.

Regional growth from Asia Pac and South America

Looking at the regional picture for UK exports, Europe remains the UK’s biggest trading partner for exports with a 46.3% share. North America is next with 17.2%, while Asia Pacific (7%), Sub-Saharan Africa (5.4%), Mena (1.8%) and South America (1.2%) follow.

However, the fastest growing market is Asia Pacific, where exports are expected to grow at 3% a year to 2021. South America, with UK exports expected to grow by around 0.5% annually until 2021, is the second fastest growth region.

Iain Hunter, CEO of Wyelands Bank, added “Behind these headline economic figures, trade is important because it creates jobs. It has helped to contribute to the UK’s record employment levels, providing financial security for millions of families up and down the country.

“However, in order for businesses to succeed, they need working capital. It is only by providing better access to funding that we can support businesses to trade, grow and create jobs.”

The analysis is based on the trends and patterns in trade flows which is projects forward.  It does not account for potential political or policy changes.


Read 1421 times Last modified on Monday, 20 August 2018 08:48

By clicking “Accept All Cookies”, you agree to the storing of cookies on your device to enhance site navigation, analyze site usage. Site Terms and conditions