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Economic crisis blamed for slow steel growth

The UK steel industry ended 2011 with output up just 0.8%, according to a trade body.

UK Steel, a division of EEF, the manufacturers’ organisation, said the Eurozone crisis and continuing economic uncertainty “year badly affected demand as customers ran down stocks”.

According to data released output per week in 2011 was 182,298 tonnes a week compared to 180,850 tonnes a week in 2010.

Output in Q4 2011 was 7.7% below the previous quarter (168,192 tonnes per week compared to 178,485 tonnes per week). This was also 0.5% below Q4 in 2010 (171,739 tonnes per week) and the lowest quarterly steel output since the depth of the recession in Q1 2009 (162,139 tonnes per week).

Ian Rodgers, director of UK Steel, said: “After an improvement in the first half of last year, steel demand could not escape the nervousness in key customer sectors about the strength of both the UK and Eurozone economies.

“However this low output level is not an accurate indication of the underlying level of consumption. Stocks in supply chains are now at very low levels, and re-stocking in the first quarter is expected to help drive a recovery in steel output.”

The news came as administrators appointed by the Saudi owners of Thamesteel in Sheerness attempt to find a buyer for the firm to save 400 jobs.

Thamesteel’s facilities include an electric arc furnace that melts steel scrap to produce long steel products used in construction.

Last week Tata announced 110 job losses at its plant in Corby, Northamptonshire, under a “recovery plan”.

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