Can a $673M Railway Deal Keep British Steel on “Track?”
British Steel has secured a 5-year agreement to supply rail to Network Rail, the infrastructure manager of the UK’s rail network. Under the tenets of the deal, the steelmaker will provide 70,000 to 80,000 metric tons per year.
In a June 17 statement, British Steel reported that the contract is worth £500 million (almost $673 million) and has an option to extend by three years.
British Steel Recently Constructed New Rail Facility
Rails supplied from British Steel’s Scunthorpe plant, in Lincolnshire, are to include HP335 grade material as well as coated rails for difficult environments, such as at level crossings, tunnels and coastal regions. The company stated that British Steel has supplied rails to the UK networks for over 20 years. Other rail products include sleepers as well as conductor rails for electric trains.
British Steel opened a rail stocking facility at Scunthorpe in November, which can hold up to 25,000 metric tons of finished rail in lengths up to 108 meters. Investments into that project totaled £10 million ($13.4 million).
Facing challenges in tracking metal price movements? Access monthly price trends for 10 different metal industries by signing up for MetalMiner’s Monthly Metals Index Report, ensuring you’re always ahead in your sourcing strategy.
UK Government Delays HS2
Meanwhile, the UK Government announced June 18 a delay on the country’s High Speed 2 (HS2) rail project, which was tentatively due to start operating by 2033, though did indicate when it would begin operating in revenue service.
Transport Secretary Heidi Alexander made the announcement in the House of Commons, the UK parliament’s lower chamber, citing missed deadlines and ballooning costs. Alexander also said that she would provide an update on costs and deadlines by year’s end.
The HS2 project originally had a cost projection of £56 billion ($75.5 billion). That was back in 2015. However, a government-commissioned review in 2019 warned that the project could reach £106 billion ($143 billion).
The original project also stipulated running the line up to Leeds and Manchester, though the previous government of Rishi Sunak cancelled them in 2021 and 2023, respectively. Alongside that move, they also truncated the line to run only as far as Birmingham.
Tired of paying for metal price data you don’t use? With MetalMiner Select, you can access only the specific metal price points relevant to your business, eliminating wasteful spending on unnecessary data.
