UK Steel Industry Hit by Triple Whammy

Tata Steel is mulling the closure of UK plants following a review of its European business, the firm said on March 30. It blamed the situation on high energy costs and business rates and dumping. “Any limited recovery since the 2008 recession has been taken up by an upsurge in unfairly traded imports including from China,” it said.

Tata has “noted with deep concern the deteriorating financial performance of the UK subsidiary in the last twelve months. While the global steel demand, especially in developed markets like Europe has remained muted following the financial crisis of 2008, trading conditions in the UK and Europe have rapidly deteriorated more recently, due to structural factors including global oversupply of steel, significant increase in third country exports into Europe, high manufacturing costs, continued weakness in domestic market demand in steel and a volatile currency.”

EU industry group Eurofer blames China for some of its woes, saying mid-March that China did not meet the EU’s five criteria to be considered a market economy. “The European Commission must follow through on its support for jobs and growth in the EU, and must not give way to countries that continue to dump on the EU market,” it said, calling for a new trade defence instrument (TDI). 

The UK is said to be among those holding up the changes proposed to the TDI, but the UK wants China to invest with EDF in its nuclear power sector.

Tata Steel Europe said it would explore all options for portfolio restructuring including the potential divestment of Tata Steel UK, in whole or in parts “in a time bound manner.” 

William Powell