Engineering news
Tata Steel's Long Products Europe business is to stop production of steel plate with the loss of 1,170 jobs at its plants in Scunthorpe, Dalzell and Clydebridge.
The company said the decision comes in response to 'a shift in market conditions caused by a flood of cheap imports, particularly from China, a strong pound and high electricity costs'.
Karl Koehler, chief executive of Tata Steel’s European operations, said: “The UK steel industry is struggling for survival in the face of extremely challenging market conditions. This industry has a crucial role to play in rebalancing the UK economy, but we need a fairer system to encourage growth. The European Commission needs to do much more to deal with unfairly traded imports – inaction threatens the future of the entire European steel industry.”
About 900 jobs will be lost at its Scunthorpe plant and 270 in Scotland, as well as a small number at other Long Products Europe sites. Plate mills in Scunthorpe, Dalzell and Clydebridge would be mothballed, while one of the two coke ovens at the Scunthorpe steelworks would be closed.
Scunthorpe MP Nic Dakin said: “I asked the prime minister yesterday to take immediate action to stop the Chinese dumping of steel before it is too late. With the Chinese premier's visit the media have picked this up and this is increasing the pressure on the government.
"It's good that North Lincolnshire Council is putting together a task force to ensure maximum support is given to those affected by the job losses. This needs to be focused on contractor and supply chain jobs as well as those directly employed.”
Gareth Stace, director of UK Steel, added: “Our fears about further job losses have now been confirmed. If we are to stem this tide then the business secretary must now deliver as a matter of urgency the commitments he made at last week’s summit, on energy costs, business rates costs and tackling unfair trade. In addition, we must also see a commitment from all parts of government at the highest level to ensure the sector’s survival in the UK.
“The prime minister can demonstrate that he is prepared to lead this commitment by stepping in this week and pressing the Chinese premier about the dumping of under-priced steel which is one of the major factors killing our industry.”
The announcement comes hours after Caparo Industries confirmed that most of its business was going into administration and weeks after 1,700 workers lost their jobs at the SSI Redcar plant.
Last night administrators at Caparo revealed that 16 of the 20 business units that make up the company have gone into administration potentially affecting more than 1,700 jobs.
Matt Hammond, lead administrator and partner at PwC, said: “This is a significant business with a wide range of interests across steel, engineering, vehicles products and technologies. We will be rapidly assessing all options for the businesses through this week and beyond.
“The impact of steel prices and exchange rates has had an impact on some parts of the Caparo Industries group. However, there are businesses in the group that are not directly affected by steel prices, and likewise many where there is both strong customer demand and critical supplier support.
“Our focus for the next 36 hours is on briefing staff across the group and working closely with their management teams to ensure that every opportunity for these businesses is considered. We will be working with all parties to ensure the best outcome for all creditors of each business,” Hammond added.