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Tata confirms steel plant closures

Tata Steel’s Long Products Europe division has confirmed an end to production of steel plate and the loss of 1,200 jobs, including 900 at Scunthorpe and 270 in Dalzell and Clydebridge in Scotland.

The decision will also affect those working in the plants’ supply chains. The company blames cheap imports, particularly from China, a strong pound and high electricity costs.

Karl Koehler, chief executive of Tata’s European operations, said he realised how distressing the announcement would be but the UK steel industry was struggling for survival in “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.”

A consultation process with Tata Steel employees and their trade union representatives is underway. Earlier this month, SSI liquidated its Redcar plant and put 2,100 people out of work and this week administrators from PwC were appointed to 16 out of 20 units of the specialist steel manufacturer Caparo Industries.

The formal announcement from Tata comes the day after metals companies and associations launched a strategy for the industry with the backing of BIS minister Anna Soubry.

Meanwhile, the latest briefing from the Bureau for International Recycling (BIR), published before the latest closures in the UK, indicates the scale of the growth in Chinese exports.

William Schmiedel, president of the BIR ferrous division and president of Sims Group Global Trade Corporation, said China’s finished steel exports in July and August combined were a then-record 19m tonnes but had been eclipsed by the 11.3m tonnes shipped out in September alone.

“In response to this, ferrous scrap prices have dropped in order to compete, reaching levels that we have not seen in 11 years,” he said.

Board member Tom Bird, of Mettalis Recycling, said: “Since the previous report in July, we have seen some of the most challenging trading conditions ever witnessed. As stated in the conclusion, the outlook for the final two quarters of 2015 would depend greatly on the continued flow of Chinese billet.

“Unfortunately, the reality has been an increased flow of even cheaper Chinese billet, further depressing the price of steel scrap in the EU.”

He said commentators were asking whether the current trading environment was worse than that experienced in 2008.

“The fundamental difference between now and then is that, in 2008, we had experienced a number of extremely buoyant years.

“While still hit hard in 2008, there was something put away for harder times whereas now we have had tough and challenging conditions for the last couple of years and, in many cases, ‘the cupboards are not as well stocked’.”

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