Latest news with #Marcegaglia
New York Times
6 days ago
- Business
- New York Times
Britain Gets a Steel Tariff Carve-Out, but Europe Pays Double
Britain breathed a sigh of relief on Wednesday after it was granted a carve-out from President Trump's 50 percent tariffs on steel and aluminum imported to the United States, while the rest of Europe fumed that it was now paying twice as much. The exemption for British exports was granted because the country had already agreed to the framework of a trade deal, which was announced to much fanfare on May 8. But Britain's steel industry is still frustrated that it faces 25 percent tariffs because the pact has yet to be put into place. And Britain still faces the prospect of 50 percent tariffs on those goods starting July 9 if London has not ironed out a final deal with Washington. 'This is a time-bound vote of confidence for U.K. steelmaking and our industry's ability to supply to the U.S. market, but in many ways also creates further uncertainty, which is disruptive,' said UK Steel, an industry trade group. Some customers in the United States are still ordering semifinished steel from Marcegaglia Stainless Sheffield in Britain's Midlands, said Christian Bruggmann, the company's chief operating officer. Britain is better positioned than producers from other countries that have to pay the higher tariff, but the latest wrinkle 'creates more uncertainty,' he added. Some of Marcegaglia's steel is processed through Sweden and Italy and would be subjected to the 50 percent tariffs. And company executives worry that Europe will be swamped by exports from countries like China and Indonesia, increasing competition for European steel. 'The competition will be even worse,' Mr. Bruggmann said. Want all of The Times? Subscribe.
New York Times
10-05-2025
- Business
- New York Times
With U.S. Trade Deal, British Steel Industry Feels Some Much Needed Relief
The call from a supervisor came to the steel shop floor in Sheffield, England, on Thursday afternoon: The tariffs were off. 'Everything had changed for us,' said Richard Bott, as he stood near stacks of steel slabs still radiating waves of heat from the mill. In a trade deal with Britain announced with much fanfare on Thursday, President Trump agreed to lift the 25 percent tariffs on steel that had posed a dire threat to Britain's struggling industry and to Mr. Bott's employer, Marcegaglia Stainless Sheffield. The cavernous plant is one of the last remaining large steel-making facilities in a city that since the 18th century was a hub of innovation in the industry. The plant is now old and dusty, but it is in some ways avant-garde. It uses an electric furnace, a technology the government wants other mills to adopt to reduce emissions, to melt piles of sparkling stainless steel scrap into molten metal. Marcegaglia, part of a family-owned company in Italy, ships more than 100 million pounds' (or about $133 million) worth of steel from Britain to the United States annually, around a quarter of the country's steel exports. Want all of The Times? Subscribe.
Yahoo
21-03-2025
- Business
- Yahoo
How Donald Trump's tariffs are wreaking chaos in the British metal industry
As the clock ticked down towards 12.01am Eastern Standard Time on 12 March, Liam Bates kept refreshing his browser. Over the preceding weeks, Marcegaglia, the stainless steel company whose long products division he headed up, had rushed to melt and ship as much metal as it could from its furnaces in Sheffield across to the east coast of America, ahead of the imposition of tariffs. UK and US industrially interlocked Of all the varieties of steel, stainless steel - an alloy of iron and chrome, along with other elements like nickel, molybdenum and carbon - is among the most important. Unlike most other iron alloys, which can rust when they encounter oxygen, stainless steel has a passive film that protects it from corrosion and can even self-heal. That makes it essential not just for use in sinks and cutlery (where most people will encounter it on a daily basis) but, arguably even more essential, in surgical instruments, heavy machinery and the pipes and ducts out of sight but essential to keeping civilisation working. The trick of how to make stainless steel in large quantities was discovered here in Sheffield by Harry Brearley, and while the laboratories he worked for shut down long ago, the furnace at Marcegaglia, in an industrial park just outside the city, can trace a continuous thread back to him. This furnace used to be owned by British Steel, the nationalised corporation responsible for most of Britain's steel manufacture until the days of privatisation. Ever since the invention of stainless steel, Britain has melted, cast and exported vast quantities of the stuff to America. For all that the US has a sizeable stainless steel sector, the two countries' stainless sectors have nonetheless been industrially interlocked since the days of Henry Ford. You can see it in the way Marcegaglia functions. It melts down scrap in its electric arc furnace in Sheffield - an enormous cauldron whose electrodes create a storm of lightning that consumes the same power as a sizeable northern city - and adds the relevant alloy ingredients to form a long, heavy metallic bar, a billet as it's known. That billet is then shipped across the Atlantic to the company's other site, where the billets are processed into bars that are then sold into the North American market. It is a single economic organism, split only by an ocean. But today that ocean and that cross-country split have become an enormous problem. The last time Donald Trump imposed tariffs on steel imports, back in 2018, so-called "intermediate" products like the billet made by Marcegaglia and then processed in America were excluded from the duties. This time around, the initial tariff rules had no such exemptions. The upshot was that any steel arriving in American ports after 12.01am Eastern Standard Time on 12 March - including Marcegaglia's half-finished stainless billets - would incur hefty 25% tariffs. A race against time All of which was why Liam Bates had raced to get as much steel as possible into the US before that deadline. But as he refreshed his browser in the run-up to that deadline, he noticed two straggling shipments, still stuck on the Atlantic. The two ships, the Eva Marie and the Atlantic Star, were, between them, carrying about $12m of steel and they had been due to dock in the US on 10 or 11 March. If so, they would have avoided having to pay those 25% tariffs. But now storms and squalls were spreading across the North Atlantic. Would they stray into the ships' path, disrupting shipping? If the cargo arrived late, it would obliterate any margin the company hoped to make on its steel. And since those bars were destined for Marcegaglia's own plant, the company would have to pay all those costs itself (tariffs are technically paid by the importer). Somehow, Bates had found himself helplessly witnessing an unexpected collision of politics and weather - with profound commercial consequences. Of all the metal items Britain exports to the US, stainless steel is by far and away the biggest category. And the vast majority of that steel comes from the melt shop at Marcegaglia. But the quandary facing Liam Bates, and those companies he sells to in the US, helps illustrate the difficulties of economic policy-by-tariff. Americans will see cost of most things go up The prevailing theory behind the White House measures is that by raising the price of all imported metals, it will encourage domestic producers to build new production. It will help the US to reindustrialise - or so says Donald Trump. And in the long run, that might well prove right. Already, metals producers are raising money, promising to restart old, mothballed smelters. After all, if your main overseas competitors have seen their prices rise by 25%, that's quite a competitive opportunity. The problem is: building industrial production takes time. Marcegaglia itself is planning to replace its old furnace with a newer model, but the planning process has already taken years; the construction itself will be measured in months if not years too. In other words, even if everything goes to plan, America is very unlikely to replace imported steel with domestic production within the period of Donald Trump's term as president. In the meantime, American consumers will see the cost of pretty much everything going up. After all, steel - ignored or dismissed as it sometimes is - is the single most important metallic substance in the world. If something isn't made of steel it's made in machines made of steel. And lifting some of those steel prices by 25% will travel like an economic tidal wave through US supply chains. UK flooded with cheap imported steel The tidal wave is already washing back elsewhere too. With so much steel now unable to get into the US at a decent price, exporters are redeploying shipments elsewhere. All of a sudden countries like the UK are seeing a flood of cheap imported steel - good news in the short run for consumers, but disastrous for what is left of Britain's domestic industry. As the deadline approached and Bates nervously refreshed his live vessel tracking map, disaster struck. The squalls across the Atlantic mounted and the Eva Marie and Atlantic Star slowed nearly to a halt. By the time midnight struck and the tariffs came into place, the two vessels were still many miles off the US coast. They had lost the race. The upshot was Marcegaglia would have to pay around $4m in tariffs - about £3m. That a company was struck with a somewhat arbitrary fee simply to pass goods from one of its factories to another might be among the most egregious examples of the collateral economic damage wrought by trade barriers, but it is likely to be the first of many perverse episodes, with consequences all around the world. For steel is not the only metal to be hit with tariffs. If anything, the drama is even greater for another metal: aluminium. The world's biggest factory - hidden in Scotland Here's a riddle for you: what is the biggest factory in the world? You're probably thinking of vast, cavernous car production lines in Michigan, of shipyards in Korea or steelworks in China. But there's a strong case to be made that the world's biggest factory is instead to be found deep in the Highlands of Scotland. Not that it looks anything like a factory. To the untrained eye, it looks, instead, like heather, forests and bubbling burns of water trickling into lochs. But the 114,000 acres of estates in Lochaber and Badenoch - the third biggest rural estate in Scotland - play a crucial role in helping produce one of the most important substances in the world. The Fort William aluminium plant sits under the shadow of Ben Nevis, the tallest peak in the United Kingdom. Once upon a time, it was just one of a constellation of smelters dotted around Scotland, that made this country, all told, one of the world's biggest aluminium producers. For all that it is very prevalent in the earth's crust, aluminium used to be one of the world's most precious metals - so much so that no one had even laid eyes on it until the 19th century. When he wanted to impress his guests, Napoleon III served them dinner not on gold plates but on aluminium. An extraordinary metal Why? Because aluminium is very difficult - even harder than iron - to convert from the ores you find in the ground into its metallic form. Burn iron ore hot enough, in the right kind of furnace alongside the right kind of charcoal or coal, and you eventually smelt out a form of metal. But aluminium needs a different kind of force to be persuaded to loosen its bonds and form into a pure metal - the force of electricity. So only when the Hall-Heroult process, which allows you to smelt aluminium via electrolysis of alumina (a processed version of the bauxite you get out of the ground), was invented in 1886 did aluminium become a widely available metal. Few people talk these days about the Hall-Heroult process, but it was a breakthrough of earth-shattering proportions. Aluminium is an extraordinary metal - strong but light. And those qualities make it essential in aeronautic deployments. No aluminium, no planes. It is no coincidence that the Wright Brothers' plane at Kitty Hawk had an engine made out of aluminium. Steel would have weighed the glider down too much. And it's no coincidence that powered flight happened shortly after aluminium became widely available. Without the Hall-Heroult process, the world would have been a very different place. While the process wasn't dreamt up in the UK, British industrialists rapidly embraced it, building smelters all over the country. But the catch with aluminium is that you can't smelt it without a big and (this is important) very reliable supply of power. Turn off the power to those enormous carbon electrodes inside an aluminium smelter and in a matter of hours the metal at its base will solidify, effectively destroying it. More than nearly any other industrial process, this is not something you can just switch off willy-nilly, which helps explain why smelters aren't typically dependent on variable power sources like wind and solar. It also explains why, throughout history, these plants have been seen as some of the most important industrial locations throughout the world. The Fort William plant provided most of the aluminium used in Spitfires during WWII. It was repeatedly targeted by the Luftwaffe - indeed there is an old German bomb kept as a memento just near the turbines that power the cells here. Some of the world's earliest smelters were powered by hydroelectricity - most notably the ones which drew their power from the Niagara Falls plants near Buffalo, New York. But the Fort William plant was subtly but importantly different. Those other hydro plants would typically piggyback off a big dam generating power from a big river - such as the ones you find in the US or Canada, or the fjords of Norway. But none of Britain's rivers is quite powerful enough or with a reliable enough flow to provide that kind of uninterrupted power. Radical design So the designers of the Fort William plant did something radical. They bought up vast stretches of the countryside around Ben Nevis (including Ben Nevis itself). And within that estate, they built a series of dams to collect the rainwater trickling down from local watersheds. Those dams weren't there to generate power for homes - they were there to collect the water and channel it through a series of tunnels, running 16 miles through the hills and through the flanks of Ben Nevis. Then the water, collected from those 114,000 acres, feeds five pipes running down the side of the mountain which run into an enormous hydroelectric power station. There are many aluminium smelters around the world and many hydroelectric dams. But none are quite like this one. The point being that without the estate, without all those trickling streams and heather-covered watersheds, the plant here simply wouldn't function. It is all part of a single ecosystem. These days the plant is connected to the national grid, meaning it also serves another function: balancing. This comes back to one of the dysfunctions of the grid: it doesn't have enough high-voltage lines connecting Scotland, with all its wind farms, and the south. So on windy days, when there's too much power in Scotland, instead of curtailing those farms and wasting the electricity, the plant can suck in extra power from the Scottish section of the grid and leave its water where it is as a sort of battery. Competition from China The problem the plant has faced is that these days aluminium is a commodity metal. And it's becoming harder and harder to compete with the cheap metal being exported from China. China dominates the global supply of the metal, in large part because its suppliers benefit from cheap energy and generous government subsidies - neither of which are available in the UK. As the years have gone by, the workers at Fort William have watched as, one by one, every other plant in Britain was shuttered. Rumours still abound that they may eventually be next. And, much as for Marcegaglia down in Sheffield, the tariffs on aluminium will only make life tougher for Alvance, the unit of Liberty House - part of Indian-born Sanjeev Gupta's business empire - that now owns the Fort William plant. Arguably, the impact could be even greater. The last time Donald Trump imposed tariffs on aluminium back in 2018, the rate he chose was 10%. The difference with the steel tariff level (which was 25% then and now) reflected the fact that the US imported far more aluminium than steel. Imposing severe extra costs on it would, the White House worried, cripple the American aerospace and car businesses dependent on the metal. No such concern this time around. The tariff is 25%. Quite how that will affect the plant here in the Scottish Highlands remains to be seen. After all, Alvance itself doesn't sell anything directly to the US, sending its large slabs of metal to other firms in England which process and roll them into sheets and specialised components, some of which end up in the US. Perhaps, as the defence industry ratchets up in the coming years, more of that aluminium will be used by domestic industry. But what's to stop UK manufacturers doing what they've been doing for years, and simply opting for the cheapest metal available, which usually comes from China? Either way, life for the last remaining aluminium plant in the UK is about to get harder, not easier. But while the main upshot of the trade war building across the Atlantic and the Pacific will be to make both sides worse off - that, at least, is the prediction from the Organisation for Economic Co-operation and Development - that doesn't mean there won't be some beneficiaries in this country. For a small but important example, let's travel from the far north of Britain to its far south. UK has one of its biggest resources in world Drive across Dartmoor, the windswept national park in the heart of Devon, and every so often you come across the remains of an old tin mine. At Fox Tor you find the remains of alluvial mining; there is Golden Dagger Mine, which ran all the way to the 1930s, as well as the hollow stone chimney of the pumping house at Wheal Betsy. For much of the ancient era, tin - which when mixed with copper creates the alloy bronze - was what we would today call a "critical mineral", essential for the production of the strong tools and weapons of the Bronze Age. And for centuries, the majority of Europe's tin came from Cornwall and Devon. That, of course, is long in the past. But just on the outskirts of Dartmoor is a site that could - just could - make this an important site for critical minerals once again. For here, beneath the soil of southwest England, is one of the world's biggest resources of tungsten. Tungsten among few substances on everyone's list Tungsten is among the 21st century's most important critical minerals. Nearly every country has a list of these materials - the kinds of things they need to make their most important products - and the members of those lists vary by region. But tungsten is one of the few substances that feature in everyone's list. The hardest metal in existence, with the highest melting point, it is essential in the production of hard steel tools, weapons, armour and as the electrodes inside semiconductor circuits. If you are making electronics you need tungsten. If you are going to war you need tungsten. Perhaps it's no coincidence that the main heyday for this mine, which contains plenty of tin as well as tungsten, was in the First and Second World Wars. Much as the Fort William plant provided aluminium for British Spitfires, Hemerdon provided the tungsten and tin needed for the weapons Britain used to fight the Nazis. But ever since then, its history has been chequered, to say the least. It went into hibernation for decades, a sleep broken for only a single day during the Korean War. Then, a few years ago, investors tried to get it up and running again. They built a vast processing plant and began to mine the metal. But by 2019 the operation had run out of money and imploded. All that was left was an even bigger hole in the ground, a large tailings dam for waste and a hangar filled with processing equipment. In part, the reason Hemerdon went belly-up that time was because the company made the mistake miners often make: they misjudged the type of ore they were expecting to grind through, meaning their processing plant was far less efficient than it could have been. But an even bigger challenge came back to something that will sound familiar: they were trying to compete with China. China dominates world tungsten production - even more so than for aluminium and steel. It essentially controls the global market and, just as importantly, the tungsten price. Anyone trying to sell tungsten is contending with Chinese prices which can yo-yo for reasons no one can entirely explain. That makes it fiendishly difficult to compete. But in recent years, new investors have begun to put fresh funds into the Hemerdon mine, hoping history will not repeat itself and this time around it can exploit that enormous ore resource. And there are at least a couple of reasons to believe (famous last words in finance) that "this time might be different". The first is that, in retaliation against Donald Trump's latest metal tariffs, China has begun to put export limits on tungsten. How this will work in practice remains unclear (remember that like most markets China controls, the way tungsten sales function is almost completely opaque) but if it encourages domestic buyers to look for local suppliers, that could help the mine to find buyers. After all, in theory, it could produce a few thousand tonnes of the metal each year, which would instantly leapfrog Britain to become the world's second or third-biggest producer (albeit a long way down from China). Supplies matter more than ever The second big shift comes back to defence. With the world remilitarising, all of a sudden tungsten supplies matter more than ever. And since defence suppliers pay outsized attention to where metals come from, again, that might allow a British tungsten mine to succeed where predecessors have failed. Add to this the fact that the mine itself is nearly ready to be exploited and that the new owners reckon they've ironed out the problems that beset their predecessors, and it's a compelling case. They think they could be getting metal out of the ground as soon as next year. But those overarching challenges haven't gone away. And nor has another, bigger problem facing the entire industry, not just in the UK but - perhaps even more so - in the US. How can you plan in a world where you just don't know what's coming out of the White House in the next few days, let alone the next few years? Consider: imagine you're a stainless steel producer or an aluminium smelter in the US. Those 25% tariffs mean all of a sudden in theory you have a competitive advantage over anyone shipping metal into the country. All of a sudden, there's a strong case to build a smelter or a stainless steel melting shop. So you get to work looking for backers. Uncertainty creates challenges But building a plant like this takes time. You need to find a site, connect it to high-voltage power, and build the facilities and all the necessary infrastructure. Best case scenario: it might take a couple of years, but even that is ambitious. And as you contemplate this and map out your plans, those backers will ask you the same nagging question you've been asking yourself: sure, the economics of an aluminium smelter might add up today; but what if the president changes his mind tomorrow, or next year? What if those tariffs are pulled by the next president? Then, all of a sudden, the sums very much don't add up. All of which is to say, uncertainty around tariffs is a challenge not just for those companies hoping to ship products to America, but for American firms hoping to benefit from this trade war. And bear in mind metals are only the first chapter of what could be a long saga, which ends up engulfing all corners of American trade. These are unpredictable times, however you look at it.
Sky News
21-03-2025
- Business
- Sky News
How Donald Trump's tariffs are wreaking chaos in the British metal industry
As the clock ticked down towards 12.01am Eastern Standard Time on 12 March, Liam Bates kept refreshing his browser. Over the preceding weeks, Marcegaglia, the stainless steel company whose long products division he headed up, had rushed to melt and ship as much metal as it could from its furnaces in Sheffield across to the east coast of America, ahead of the imposition of tariffs. Stainless steel UK and US industrially interlocked Of all the varieties of steel, stainless steel - an alloy of iron and chrome, along with other elements like nickel, molybdenum and carbon - is among the most important. Unlike most other iron alloys, which can rust when they encounter oxygen, stainless steel has a passive film that protects it from corrosion and can even self-heal. That makes it essential not just for use in sinks and cutlery (where most people will encounter it on a daily basis) but, arguably even more essential, in surgical instruments, heavy machinery and the pipes and ducts out of sight but essential to keeping civilisation working. The trick of how to make stainless steel in large quantities was discovered here in Sheffield by Harry Brearley, and while the laboratories he worked for shut down long ago, the furnace at Marcegaglia, in an industrial park just outside the city, can trace a continuous thread back to him. This furnace used to be owned by British Steel, the nationalised corporation responsible for most of Britain's steel manufacture until the days of privatisation. Ever since the invention of stainless steel, Britain has melted, cast and exported vast quantities of the stuff to America. For all that the US has a sizeable stainless steel sector, the two countries' stainless sectors have nonetheless been industrially interlocked since the days of Henry Ford. You can see it in the way Marcegaglia functions. It melts down scrap in its electric arc furnace in Sheffield - an enormous cauldron whose electrodes create a storm of lightning that consumes the same power as a sizeable northern city - and adds the relevant alloy ingredients to form a long, heavy metallic bar, a billet as it's known. That billet is then shipped across the Atlantic to the company's other site, where the billets are processed into bars that are then sold into the North American market. It is a single economic organism, split only by an ocean. But today that ocean and that cross-country split have become an enormous problem. The last time Donald Trump imposed tariffs on steel imports, back in 2018, so-called "intermediate" products like the billet made by Marcegaglia and then processed in America were excluded from the duties. This time around, the initial tariff rules had no such exemptions. The upshot was that any steel arriving in American ports after 12.01am Eastern Standard Time on 12 March - including Marcegaglia's half-finished stainless billets - would incur hefty 25% tariffs. A race against time All of which was why Liam Bates had raced to get as much steel as possible into the US before that deadline. But as he refreshed his browser in the run-up to that deadline, he noticed two straggling shipments, still stuck on the Atlantic. The two ships, the Eva Marie and the Atlantic Star, were, between them, carrying about $12m of steel and they had been due to dock in the US on 10 or 11 March. If so, they would have avoided having to pay those 25% tariffs. But now storms and squalls were spreading across the North Atlantic. Would they stray into the ships' path, disrupting shipping? If the cargo arrived late, it would obliterate any margin the company hoped to make on its steel. And since those bars were destined for Marcegaglia's own plant, the company would have to pay all those costs itself (tariffs are technically paid by the importer). Somehow, Bates had found himself helplessly witnessing an unexpected collision of politics and weather - with profound commercial consequences. Of all the metal items Britain exports to the US, stainless steel is by far and away the biggest category. And the vast majority of that steel comes from the melt shop at Marcegaglia. But the quandary facing Liam Bates, and those companies he sells to in the US, helps illustrate the difficulties of economic policy-by-tariff. Americans will see cost of most things go up The prevailing theory behind the White House measures is that by raising the price of all imported metals, it will encourage domestic producers to build new production. It will help the US to reindustrialise - or so says Donald Trump. And in the long run, that might well prove right. Already, metals producers are raising money, promising to restart old, mothballed smelters. After all, if your main overseas competitors have seen their prices rise by 25%, that's quite a competitive opportunity. The problem is: building industrial production takes time. Marcegaglia itself is planning to replace its old furnace with a newer model, but the planning process has already taken years; the construction itself will be measured in months if not years too. In other words, even if everything goes to plan, America is very unlikely to replace imported steel with domestic production within the period of Donald Trump's term as president. In the meantime, American consumers will see the cost of pretty much everything going up. After all, steel - ignored or dismissed as it sometimes is - is the single most important metallic substance in the world. If something isn't made of steel it's made in machines made of steel. And lifting some of those steel prices by 25% will travel like an economic tidal wave through US supply chains. UK flooded with cheap imported steel The tidal wave is already washing back elsewhere too. With so much steel now unable to get into the US at a decent price, exporters are redeploying shipments elsewhere. All of a sudden countries like the UK are seeing a flood of cheap imported steel - good news in the short run for consumers, but disastrous for what is left of Britain's domestic industry. As the deadline approached and Bates nervously refreshed his live vessel tracking map, disaster struck. The squalls across the Atlantic mounted and the Eva Marie and Atlantic Star slowed nearly to a halt. By the time midnight struck and the tariffs came into place, the two vessels were still many miles off the US coast. They had lost the race. The upshot was Marcegaglia would have to pay around $4m in tariffs - about £3m. That a company was struck with a somewhat arbitrary fee simply to pass goods from one of its factories to another might be among the most egregious examples of the collateral economic damage wrought by trade barriers, but it is likely to be the first of many perverse episodes, with consequences all around the world. For steel is not the only metal to be hit with tariffs. If anything, the drama is even greater for another metal: aluminium. Aluminium The world's biggest factory - hidden in Scotland Here's a riddle for you: what is the biggest factory in the world? You're probably thinking of vast, cavernous car production lines in Michigan, of shipyards in Korea or steelworks in China. But there's a strong case to be made that the world's biggest factory is instead to be found deep in the Highlands of Scotland. Not that it looks anything like a factory. To the untrained eye, it looks, instead, like heather, forests and bubbling burns of water trickling into lochs. But the 114,000 acres of estates in Lochaber and Badenoch - the third biggest rural estate in Scotland - play a crucial role in helping produce one of the most important substances in the world. The Fort William aluminium plant sits under the shadow of Ben Nevis, the tallest peak in the United Kingdom. Once upon a time, it was just one of a constellation of smelters dotted around Scotland, that made this country, all told, one of the world's biggest aluminium producers. For all that it is very prevalent in the earth's crust, aluminium used to be one of the world's most precious metals - so much so that no one had even laid eyes on it until the 19th century. When he wanted to impress his guests, Napoleon III served them dinner not on gold plates but on aluminium. An extraordinary metal Why? Because aluminium is very difficult - even harder than iron - to convert from the ores you find in the ground into its metallic form. Burn iron ore hot enough, in the right kind of furnace alongside the right kind of charcoal or coal, and you eventually smelt out a form of metal. But aluminium needs a different kind of force to be persuaded to loosen its bonds and form into a pure metal - the force of electricity. So only when the Hall-Heroult process, which allows you to smelt aluminium via electrolysis of alumina (a processed version of the bauxite you get out of the ground), was invented in 1886 did aluminium become a widely available metal. Few people talk these days about the Hall-Heroult process, but it was a breakthrough of earth-shattering proportions. Aluminium is an extraordinary metal - strong but light. And those qualities make it essential in aeronautic deployments. No aluminium, no planes. It is no coincidence that the Wright Brothers' plane at Kitty Hawk had an engine made out of aluminium. Steel would have weighed the glider down too much. And it's no coincidence that powered flight happened shortly after aluminium became widely available. Without the Hall-Heroult process, the world would have been a very different place. While the process wasn't dreamt up in the UK, British industrialists rapidly embraced it, building smelters all over the country. But the catch with aluminium is that you can't smelt it without a big and (this is important) very reliable supply of power. Turn off the power to those enormous carbon electrodes inside an aluminium smelter and in a matter of hours the metal at its base will solidify, effectively destroying it. More than nearly any other industrial process, this is not something you can just switch off willy-nilly, which helps explain why smelters aren't typically dependent on variable power sources like wind and solar. It also explains why, throughout history, these plants have been seen as some of the most important industrial locations throughout the world. The Fort William plant provided most of the aluminium used in Spitfires during WWII. It was repeatedly targeted by the Luftwaffe - indeed there is an old German bomb kept as a memento just near the turbines that power the cells here. Some of the world's earliest smelters were powered by hydroelectricity - most notably the ones which drew their power from the Niagara Falls plants near Buffalo, New York. But the Fort William plant was subtly but importantly different. Those other hydro plants would typically piggyback off a big dam generating power from a big river - such as the ones you find in the US or Canada, or the fjords of Norway. But none of Britain's rivers is quite powerful enough or with a reliable enough flow to provide that kind of uninterrupted power. Radical design So the designers of the Fort William plant did something radical. They bought up vast stretches of the countryside around Ben Nevis (including Ben Nevis itself). And within that estate, they built a series of dams to collect the rainwater trickling down from local watersheds. Those dams weren't there to generate power for homes - they were there to collect the water and channel it through a series of tunnels, running 16 miles through the hills and through the flanks of Ben Nevis. Then the water, collected from those 114,000 acres, feeds five pipes running down the side of the mountain which run into an enormous hydroelectric power station. There are many aluminium smelters around the world and many hydroelectric dams. But none are quite like this one. The point being that without the estate, without all those trickling streams and heather-covered watersheds, the plant here simply wouldn't function. It is all part of a single ecosystem. These days the plant is connected to the national grid, meaning it also serves another function: balancing. This comes back to one of the dysfunctions of the grid: it doesn't have enough high-voltage lines connecting Scotland, with all its wind farms, and the south. So on windy days, when there's too much power in Scotland, instead of curtailing those farms and wasting the electricity, the plant can suck in extra power from the Scottish section of the grid and leave its water where it is as a sort of battery. Competition from China The problem the plant has faced is that these days aluminium is a commodity metal. And it's becoming harder and harder to compete with the cheap metal being exported from China. China dominates the global supply of the metal, in large part because its suppliers benefit from cheap energy and generous government subsidies - neither of which are available in the UK. As the years have gone by, the workers at Fort William have watched as, one by one, every other plant in Britain was shuttered. Rumours still abound that they may eventually be next. And, much as for Marcegaglia down in Sheffield, the tariffs on aluminium will only make life tougher for Alvance, the unit of Liberty House - part of Indian-born Sanjeev Gupta's business empire - that now owns the Fort William plant. Arguably, the impact could be even greater. The last time Donald Trump imposed tariffs on aluminium back in 2018, the rate he chose was 10%. The difference with the steel tariff level (which was 25% then and now) reflected the fact that the US imported far more aluminium than steel. Imposing severe extra costs on it would, the White House worried, cripple the American aerospace and car businesses dependent on the metal. No such concern this time around. The tariff is 25%. Quite how that will affect the plant here in the Scottish Highlands remains to be seen. After all, Alvance itself doesn't sell anything directly to the US, sending its large slabs of metal to other firms in England which process and roll them into sheets and specialised components, some of which end up in the US. Perhaps, as the defence industry ratchets up in the coming years, more of that aluminium will be used by domestic industry. But what's to stop UK manufacturers doing what they've been doing for years, and simply opting for the cheapest metal available, which usually comes from China? Either way, life for the last remaining aluminium plant in the UK is about to get harder, not easier. But while the main upshot of the trade war building across the Atlantic and the Pacific will be to make both sides worse off - that, at least, is the prediction from the Organisation for Economic Co-operation and Development - that doesn't mean there won't be some beneficiaries in this country. For a small but important example, let's travel from the far north of Britain to its far south. Tungsten UK has one of its biggest resources in world Drive across Dartmoor, the windswept national park in the heart of Devon, and every so often you come across the remains of an old tin mine. At Fox Tor you find the remains of alluvial mining; there is Golden Dagger Mine, which ran all the way to the 1930s, as well as the hollow stone chimney of the pumping house at Wheal Betsy. For much of the ancient era, tin - which when mixed with copper creates the alloy bronze - was what we would today call a "critical mineral", essential for the production of the strong tools and weapons of the Bronze Age. And for centuries, the majority of Europe's tin came from Cornwall and Devon. That, of course, is long in the past. But just on the outskirts of Dartmoor is a site that could - just could - make this an important site for critical minerals once again. For here, beneath the soil of southwest England, is one of the world's biggest resources of tungsten. Tungsten among few substances on everyone's list Tungsten is among the 21st century's most important critical minerals. Nearly every country has a list of these materials - the kinds of things they need to make their most important products - and the members of those lists vary by region. But tungsten is one of the few substances that feature in everyone's list. The hardest metal in existence, with the highest melting point, it is essential in the production of hard steel tools, weapons, armour and as the electrodes inside semiconductor circuits. If you are making electronics you need tungsten. If you are going to war you need tungsten. Perhaps it's no coincidence that the main heyday for this mine, which contains plenty of tin as well as tungsten, was in the First and Second World Wars. Much as the Fort William plant provided aluminium for British Spitfires, Hemerdon provided the tungsten and tin needed for the weapons Britain used to fight the Nazis. But ever since then, its history has been chequered, to say the least. It went into hibernation for decades, a sleep broken for only a single day during the Korean War. Then, a few years ago, investors tried to get it up and running again. They built a vast processing plant and began to mine the metal. But by 2019 the operation had run out of money and imploded. All that was left was an even bigger hole in the ground, a large tailings dam for waste and a hangar filled with processing equipment. In part, the reason Hemerdon went belly-up that time was because the company made the mistake miners often make: they misjudged the type of ore they were expecting to grind through, meaning their processing plant was far less efficient than it could have been. But an even bigger challenge came back to something that will sound familiar: they were trying to compete with China. China dominates world tungsten production - even more so than for aluminium and steel. It essentially controls the global market and, just as importantly, the tungsten price. Anyone trying to sell tungsten is contending with Chinese prices which can yo-yo for reasons no one can entirely explain. That makes it fiendishly difficult to compete. But in recent years, new investors have begun to put fresh funds into the Hemerdon mine, hoping history will not repeat itself and this time around it can exploit that enormous ore resource. And there are at least a couple of reasons to believe (famous last words in finance) that "this time might be different". The first is that, in retaliation against Donald Trump's latest metal tariffs, China has begun to put export limits on tungsten. How this will work in practice remains unclear (remember that like most markets China controls, the way tungsten sales function is almost completely opaque) but if it encourages domestic buyers to look for local suppliers, that could help the mine to find buyers. After all, in theory, it could produce a few thousand tonnes of the metal each year, which would instantly leapfrog Britain to become the world's second or third-biggest producer (albeit a long way down from China). Supplies matter more than ever The second big shift comes back to defence. With the world remilitarising, all of a sudden tungsten supplies matter more than ever. And since defence suppliers pay outsized attention to where metals come from, again, that might allow a British tungsten mine to succeed where predecessors have failed. Add to this the fact that the mine itself is nearly ready to be exploited and that the new owners reckon they've ironed out the problems that beset their predecessors, and it's a compelling case. They think they could be getting metal out of the ground as soon as next year. But those overarching challenges haven't gone away. And nor has another, bigger problem facing the entire industry, not just in the UK but - perhaps even more so - in the US. How can you plan in a world where you just don't know what's coming out of the White House in the next few days, let alone the next few years? Consider: imagine you're a stainless steel producer or an aluminium smelter in the US. Those 25% tariffs mean all of a sudden in theory you have a competitive advantage over anyone shipping metal into the country. All of a sudden, there's a strong case to build a smelter or a stainless steel melting shop. So you get to work looking for backers. Uncertainty creates challenges But building a plant like this takes time. You need to find a site, connect it to high-voltage power, and build the facilities and all the necessary infrastructure. Best case scenario: it might take a couple of years, but even that is ambitious. And as you contemplate this and map out your plans, those backers will ask you the same nagging question you've been asking yourself: sure, the economics of an aluminium smelter might add up today; but what if the president changes his mind tomorrow, or next year? What if those tariffs are pulled by the next president? Then, all of a sudden, the sums very much don't add up. All of which is to say, uncertainty around tariffs is a challenge not just for those companies hoping to ship products to America, but for American firms hoping to benefit from this trade war. And bear in mind metals are only the first chapter of what could be a long saga, which ends up engulfing all corners of American trade. These are unpredictable times, however you look at it.
Yahoo
12-03-2025
- Business
- Yahoo
British manufacturers warn Trump's metal tariffs ‘will create severe problems'
British manufacturers have said Donald Trump's fresh trade tariffs on metals will create 'severe problems' and are a 'big concern'. Liam Bates, president of long products at Marcegaglia, a steel maker in Sheffield, said the tariffs are 'very unhelpful'. Between 15% and 20% of what Marcegaglia melts in Sheffield is sent to the US, across both semi-finished and finished steel products, he told PA news agency. Some of those products are 'already burdened', with UK producers facing issues including global competition, high energy costs and the shift to cleaner technologies. 'There was a lull in demand (for UK-made steel) anyway, and therefore to take more away and create more uncertainty does create additional issues for us,' he said. Mr Trump imposed global tariffs on steel and aluminium on Tuesday night, while raising a flat duty on steel and aluminium entering America to 25%. The move has prompted warnings of job losses in the already beleaguered UK steel industry, which counts the US as its second largest export market behind the European Union. Mr Bates continued: 'We do have a large trade flow to the US market … I don't think it's quite existential, but it will cause us to review what was a strong growth strategy.' He added: 'There are certain product lines where it does create problems on an already burdened product. 'It is very unhelpful at a time where the whole industry is struggling, but when I look at certain parts of the business it will create severe problems.' According to a memo on the tariffs published by the EU, which is also affected, they will apply to different types of semi-finished and finished products such as steel pipes, wire and tin foil. They will also apply to other products including cookware, some electrical appliances and other products only partly made out of steel or aluminium. Mark Brearley, owner of Kaymet, a small business manufacturing aluminium trays, said the latest tariffs are 'a big concern'. He said he was still unsure which of his products will be hit, but that about 20% of the company's sales of trays, trolleys and other products are to American customers. 'We have to decide whether to go ahead with production of orders that we fear may soon be cancelled,' he told PA. 'It will definitely impact sales, it will probably kill most of them in the US.' 'We have live orders for the US, and we just hope customers are not going to be really upset, and they're not going to decide to not order from us again,' he added. Meanwhile, for small firms like his, it is 'not a case of pivoting' to selling elsewhere, Mr Brearley said. 'We do our best to try and sell everywhere in the world as much as we can,' he said. 'It's not like we can just decide to sell elsewhere. For us, it would just be a hit on our sales.'
