Recycling firms in south Wales fear that the threatened closure of Tata Steel’s Port Talbot plant will damage the area’s economy and drive more material to export.
The Indian company said it would seek to sell its UK operations after a board meeting rejected a restructuring plan from its European subsidiary. It is unclear if a buyer can be found for the loss-making concern.
Talks are in progress with the UK and Welsh Governments over whether any action can be taken to save the Port Talbot plant, which is losing £1m a day.
Paul Perry, a director of Bridgend-based Broughshire Metals, said: “It’s not just the 15,000 jobs at the plant but up to 6,000 more among contractors where there will be a knock-on effect.
“We do not do a lot of business with Tata, but we have customers who do and they will be affected.”
Tony Wilson, director of Engineering Services London, also located in Bridgend, said: “There are quite a few local suppliers to Tata and, obviously, the closure would affect them. But most scrap is exported because Tata has not been taking the quantity of material that steel-makers did 10-20 years ago.”
Tata Steel Europe’s website describes Tata Steel Packaging Recycling as “the largest steel recycler in the UK”.
A company statement blamed the plight of its UK operations on the global oversupply of steel, high manufacturing costs, continued weakness in domestic market demand and currency volatility.
It said it had “suffered asset impairment of more than £2bn in the last five years”.
The restructuring plan had been rejected as unaffordable and “the assumptions behind it are inherently very risky”, the company said.
A joint statement from the UK and Welsh Governments said both were “working tirelessly to look at all viable options to keep a strong British steel industry at the heart of our manufacturing base”.
Roy Rickhuss, general secretary of the Community trade union, said: “Tata Steel withdrawing completely from the UK risks destroying our entire steel industry. That would be a disaster both for those communities reliant on steel jobs and our entire industrial base.”