Strategic Defence Review signals huge demand for UK-made steel

2 June 2025

The Government has today published the outcome of its wide-ranging Strategic Defence Review (SDR), detailing the steps needed to boost domestic manufacturing capability to support our military priorities.

UK Steel welcomes the review’s proposals, which aim to bolster UK business backing in procurement and create a “thriving, resilient innovation and industrial base”. In welcome news, the SDR intends to “create a new partnership with industry” and engage industry early in procurement processes on desired outcomes, a method that UK Steel advocated for in our defence engagement review. This seeks to end the previous policy of ‘competition by default’ which had a sole focus on price over securing local supply chains and building up domestic capability.

The SDR includes an ambitious list of new investment in munitions factories, nuclear warheads, a new UK Defence Innovation Organisation and some £7 billion investment in new barracks and defence homes – signalling a huge demand opportunity for UK steelmaking. Following the SDR and the Defence Industrial Strategy, in the Autumn a new defence investment plan will outline priorities to make defence an engine for wider economic growth. At a time of heightened global uncertainty, strengthening the UK’s defence manufacturing base represents a strategic opportunity to drive regional regeneration, support national economic growth, and create thousands of well-paid, highly skilled jobs.

UK Steel Director-General, Gareth Stace, said:

"The Strategic Defence Review’s sweeping reform of procurement policy aligns closely with the UK steel industry’s longstanding ambition to contribute more directly to national security, resilient supply chains, and the reshoring of critical materials. It is imperative that the UK backs its own sovereign steelmaking capability as part of this ambition.

“Steel is not only integral to the construction of naval vessels and armoured vehicles but is also the foundation of essential defence infrastructure, from barracks and warehouses to shipyards and logistics hubs. British steel should, wherever feasibly possible, be the default choice for projects of national importance. The Defence Secretary has made clear his desire for more domestic steel to be used across defence programmes, and this review marks a turning point in converting that commitment into policy.

“UK steel producers stand ready to play a full role in delivering high-quality steel into Ministry of Defence projects of all types. The forthcoming Defence Industrial Strategy must now set out in detail how this will be achieved. The development of the Steel Strategy and the National Wealth Fund are essential tools in identifying and addressing gaps in capability, ensuring that the widest possible range of steel grades can be sourced from UK mills and furnaces to meet our national defence needs.”

ENDS   Jon Harrison, Regulatory Affairs Manager, UK Steel 
07743 829613 | jharrison@makeuk.org 

Louise Young, Campaigns and Engagement Manager, UK Steel 
07388 370176 | Lyoung@makeuk.org

Notes to Editors

MOD steel procurement statistics: 

• The latest ‘backward look’ of steel purchased by the MOD in 2023 shows that almost £10 million of steel products that could have been purchased from UK suppliers were not, depriving the UK industry of a significant amount of investment, which instead went to foreign companies
•  In addition, a significant £37.4 million of steel products, predominantly heavy plate, were purchased abroad – demonstrating a significant opportunity is being missed by the UK in not utilising our own existing plate capacity or investing in new machinery to enhance our existing offering.
• The Ministry of Defence’s ‘forward look’ 2023 pipeline showed that:
• The MOD procured or is currently procuring at least 82,000 metric tonnes of steel, with certain project requirements still being undecided.
• Most projects listed also do not specify where steel is procured from, and those that do primarily state Sweden as the source of steel.
• Of the projects listed in the pipeline, defence estate and infrastructure represent at least £14 million of capital expenditure on steel alone, with another 14 projects’ capital expenditure still unknown.
• An additional £59m, likely more due to some project expenditures not yet being forecasted, is represented by capex on warships, submarines, and vehicles.

 UK Steel procurement recommendations: UK Steel’s Defence Procurement Position Paper (2024) outlines a template to strengthen the supply UK-made steel into MOD, highlighting that: 

• The industry should be represented at key points on a Defence Suppliers Forum.
• There is a need to formalise pre-procurement dialogue to demonstrate UK steelmakers’ capacity and capabilities and this process should be embedded in the MOD Strategic Partnering Programme (SPP), to increase transparency and align project needs with domestic capacity.
• Steel should be formally recognised as a strategic asset as the industry is essential to national security for domestic supply.
• The MOD should follow best practice set out by other Departments to adhere to the Government’s own Procurement Policy Note for Steel.
• Mandate a percentage of domestic steel content as allowed by World Trade Organisation rules.
• Government should provide a clearer definition of ‘social value’ in defence contracting and explain how it influences procurement decisions, especially under PPN 06/20.

 UK Steel’s Public Procurement Report (2024) recommends: 

• Public Procurement Contracts: The UK Government should use the contribution our steel industry makes to national security to mandate or incentivise the use of UK-made steel, where possible, for projects of energy, defence, and related infrastructure via domestic content stipulations in contracts where public funding or subsidy is involved utilising World Trade Organisation (WTO) opt-outs.
• Contracts for Difference (CfDs): In future auctions, the Government should evaluate the bidders’ contributions to sustainability, resilience, and local content, with these criteria applying to at least 30% of the volume auctioned annually, as the EU is currently implementing without challenge in its Net Zero Industry Act.
• Nationally Significant Infrastructure Projects: These should be required to adhere fully to the Procurement Policy Note for Steel⁵ and, given their criticality for our economy, be subject to local content requirements of not below 30%.
• Procurement Policy Note for Steel (PPN): The existing PPN should be strengthened to require developers and public bodies to justify why they did not use UK-made steel, if it was available, and require a mandatory consultation of the forthcoming UK Steel Digital Catalogue.