Steelmaker Corus has unveiled plans for a £10m automated distribution centre in Scunthorpe which will mean the loss of about 20 jobs.
The new unit will allow steel sections to be moved automatically from the medium section mill to a computerised stacking system and onto transport.
The centre, the first of its kind in Europe, is due to open in autumn 2006.
A Corus spokeswoman said: "It will be more efficient and safer but the downside is that jobs will have to go."
She said the company was consulting with unions and would do all it could to avoid compulsory redundancies.
Andrew Page, managing director of Corus construction and industrial, said: "This new facility will allow us to offer a first class service to our sections customers.
"By improving the quality of our delivered sections and the speed of despatch, we will have a stronger capability to deliver loads in excellent condition, directly to our customers."