Tata Steel has officially announced proposals to stop production of steep plate by its Long Products Europe business today.
The statement swiftly follows similar announcements by SSI regarding the closure of its Redcar plant last week – at a cost of 1,700 jobs, and the estimated 1,500 jobs which are now on the line following Caparo Industries administration announcement yesterday.
Tata Steel stated that the restructuring was necessary due to a result of a shift in market conditions due to a flood of cheap Chinese imports, a strong pound and unsustainable energy costs.
The proposed changes would lead to around 1,200 jobs losses – roughly 900 in Scunthorpe and 270 in Scotland, as a small number at other Long Products Europe sites.
Plate mills in Scunthorpe, Dalzell and Clydebbridge would be mothballed, while one of the two coke ovens at the Scunthrope steelworks would be closed.
Chief executive of Tata Steel’s European operations, Karl Koehler commented: “We have looked at all other options before proposing these changes.
“We will work closely with affected employees and their trade union representatives. We will look to redeploy employees wherever possible, and minimise employee hardship.”
Koehler added: “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.”
In the past two years, imports of steel plate into Europe have doubled and imports from China have quadrupled, causing steel prices to fall steeply. At the same time, a stronger pound has undermined the competitiveness of the business’s Europe-bound exports, and encouraged more imports.
In response, Tata Steel is concentrating on higher-value markets with a focus on developing stronger and lighter products for its customers.
Commenting on Tata’s announcement, director of UK Steel, Gareth Stace said: “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.”