Important News On The UK Steel Industry Crisis

After several years of job cuts and increased competition from India and China, a crisis has finally manifested in the UK steel industry. The decisive moment came when Tata Steel announced back in January that it would cut a further 1,050 jobs, having already cut thousands since May 2011. Moving forward, the industry will have to make fundamental changes if it’s to thrive once again. UK Can’t Compete with China and India The UK steel industry has faced major challenges over a number of years. For instance, the global demand for steel has not returned to level it was at before the global economic downturn in 2008. Add in the high cost of energy and the need to invest in environmental initiatives and the industry is no longer equipped to compete at a mass-market scale. With UK producers charging more for their steel, companies from China and India have gradually taken notice and started to undercut their UK counterparts. Between 2013 and 2014, this was particularly noticeable when the UK increased its Chinese steel imports from approximately 303,000 tonnes to 687,000 tonnes.UK steel production In 2014, those 687,000 tonnes were still much lower than the 4.7 million tonnes imported from EU producers. However, what made the issue worse for the UK and the rest of the EU is that China began feeling the effects of its own economic slowdown in 2015, causing the country’s steel producers to look oversees to a greater extent than ever before. China has been widely reported as overproducing steel, which has resulted in producers dramatically undercutting foreign companies – this has been termed as “dumping”. To counter the issue, the US increased import tariffs on Chinese cold-rolled steel from 266% to 522%. The EU response was to launch an investigation in May, with the European Steel Association citing China’s cost-saving subsidies as enabling the practice of dumping. Non-EU Producers Increase Prices Amid the crisis, European steel producers situated outside of the EU have been able to capitalise on a lack of competitively priced flat steel products. Market specialist MEPs reported in May 2016 that non-EU third-country producers have turned around their own loss-making circumstances by increasing prices to EU customers. Thus far, there has been a dramatic rise in steel costs. In May alone, there was a £60 increase per metric tonne, with a further £60 added from 1 June 2016. The additional revenue drawn from existing steel stocks is to facilitate the production of higher-cost steel products. Getting the Best Steel Prices The changing landscape of the global steel industry has meant that SSC is now more proactive than ever in sourcing competitive prices. At present, price increases are a certainty, but that will not stop us from getting the best possible rates. There will be a rise in the cost of our laser engineering, but this is only to guarantee that SS can continue to produce elite steel products for you and for all of our customers. Please call us on 01889 270241 or email sales@ssclaser.co.uk if you have any question about steel price increases.

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