Liberty Steel UK (LSUK) has begun its next restructuring programme phase, which will include a reduction in primary production at Rotherham and replacement by imported billet and slab. Despite a £200 million ($243m) shareholder capital injection over two years, the firm says some production has become unviable due to high energy costs and imports, Kallanish notes.

LSUK will focus on high-value alloy steel production at Speciality Steel UK (SSUK) sites in Rotherham, Stocksbridge and Brinsworth, serving strategic aerospace, energy and engineering supply chains. SSUK will ramp up high-value production at specialist plants through the year with a view to breaking even in September, laying the ground for further upside potential. LSUK has also halted the sale process for the Stocksbridge and Brinsworth plants.

The imported semi-finished product will feed rolling and finishing lines at Rotherham, Scunthorpe, and Dalzell as an interim measure to mitigate the impact of uncompetitive energy costs, LSUK says.

The firm will also idle Liberty Steel Newport and downstream processing facilities, and Liberty Performance Steel West Bromwich, with the former transformed into a sales and distribution hub for Liberty products.

Finally, the steelmaker has committed to restart commodity production and idled plants when market and operating conditions allow. Its longer-term aim is to grow Rotherham into a 2 million tonnes/year “green” steel facility.

The move may potentially impact up to 440 roles across the business. The company says it will consult with employee representatives, trade unions and UK government throughout the process.

“Refocusing our operations will set the right platform for LIBERTY Steel UK’s high-quality manufacturing businesses to adapt quickly to challenging market realities,” says Liberty Steel Group chief transformation officer Jeffrey Kabel.

“The support of our marquee customers will enable us to produce high value, differentiated products through 2023 and beyond for strategic sectors such as aerospace, defence and energy. We remain committed to our longer-term growth plans in the UK including our plan to grow Rotherham into a 2 million-tonne green steel hub,” he adds.

Reacting to the news, UK Steel director general Gareth Stace says: “High energy prices have played an important role in the decisions announced today, with long-standing uncompetitive electricity prices having constrained UK investment and steel production for some time. This highlights again the need for government to fully address the UK’s structurally high industrial energy prices, looking beyond the important announcements made regarding the Energy Bills Discount Scheme earlier this week.”