UK steelmakers are now paying almost £30 per megawatt hour more for electricity than their French competitors. That is the widest gap in three years, according to new analysis by the trade body UK Steel, reported by The Guardian this week. The gap had narrowed to around £18/MWh last year, but higher global gas prices have pushed it back up, because the UK wholesale gas price still sets the price of electricity. Against Germany the gap is smaller, at around £12/MWh.

This matters because electric arc furnaces, the cleaner way of making steel that much of the UK industry is moving towards, run on electricity. UK Steel is calling for a price cap mechanism, which it estimates would cost about £51m a year. The government points to measures cutting electricity bills by up to 25% for more than 10,000 manufacturers.

What it means for buyers of laser cut and fabricated parts

At Kaizen Engineering we laser cut, press brake and fabricate steel sheet and plate at our works in Shaw, Oldham, for customers across Oldham, Manchester, Leeds and Sheffield. Mill costs driven by energy prices feed through to plate prices over the following months, so buyers planning 2027 projects should expect material pricing to stay volatile. Our advice is simple:

• Ask for material to be quoted at current prices with a validity date. We quote material at the current price and are clear about how long a quote holds.
• Design for nesting. Small changes to part sizes can improve how many parts fit on a sheet, cutting the material cost per part.
• Talk to us about commonly stocked grades. Using standard grades and thicknesses usually keeps lead times and prices steadier than specials.

We’ll keep watching how energy costs affect steel supply. If you have a laser cutting, press braking or fabrication project you’d like priced, send your drawings to sales@kaizen-eng.com or call 01706 847172.

Sources

• The Guardian, “Electricity costs put UK steelmakers in worst position in three years against EU rivals“, 19 October 2026, reporting analysis by UK Steel.