SSI UK mothballing a huge blow to industry, says EEF

Posted on 28 Sep 2015 by Jonny Williamson

The EEF has commented on the announced suspension of iron and steelmaking at SSI’s facility in the North East of England.

Production at the plant was paused at 18 September due to what the BBC describes as “poor trading conditions across the world”, coupled with a decline in steel prices.

Resulting in a potential loss of 1,700 jobs, SSI UK director, Cornelius Louwrens stated: “This is an extremely sad day for all of us at SSI UK.”

The organisation’s chief executive, Terry Scuoler commented: “This is a very sad day for the industry and of course for the communities affected by this decision.

Terry Scuoler, CEO, EEF
Terry Scuoler, CEO, EEF.

“Any loss of the UK’s steel-making capability is a huge blow and has knock-on effects across the manufacturing supply chain.

“In the short-term we need a clear indication from Government – as a matter of urgency – that it will honour its commitment to compensate steel and other energy intensive industries from the cripplingly high cost of energy.

“Failure to do so would mark a tipping point for this vital industry which is the foundation of the success of so many other manufacturing sectors.

“Government must now sit down with the steel sector and all interested parties to examine how a long-term viable and sustainable industry can be supported in the future. This is imperative if we are to ensure that such a vital industry can be placed on a long-term sustainable and profitable footing.”

According to SSI, the business was left with little option but to suspend steel and iron making production at its Teeside site.

The expectation is for the Redcar coke ovens and power station to continue operating.

Anna Soubry, Minister for Small Business, Industry and Enterprise
Anna Soubry, Minister for Small Business, Industry and Enterprise.

Business Minister Anna Soubry stated: “Despite everyone’s recent efforts to help SSI, this is very sad news and a big blow for the workforce and their families.

“They are the priority and with SSI’s difficulties being no secret, why I asked Amanda Skelton [chief executive of Redcar and Cleaveland Borough Council] to chair a local taskforce to help support workers and the local economy.

“I also have concerns about reports that local contractors have gone unpaid.”

Soubry added: “I hope that SSI’s announcement that they are mothballing the furnace gives some hope that stell making could be restarted on Teesside in the future.

“The steel industry across the UK is facing very challenging economic conditions. The price of steel has almost halved over the past year, with overproduction in the world market. While government cannot alter these conditions, I have called a steel summit to see what more can be done to help our steel industry.”

Director of the trade association, UK Steel, Gareth Stace said: “The loss of jobs and the mothballing of steel production in Redcar is terrible and distressing news.

Gareth Stace, new director, UK Steel.
Gareth Stace, director, UK Steel.

“We’ve called for an emergency summit with Government to look at what more can be done to support the industry. We’ve enjoyed a lot of tea and sympathy but this summit needs to result in concrete action and support from Ministers to reassure the industry and help support its long term future.

“At the top of the list must be a commitment to deliver on its promise and help create a level playing field for British steel by fully compensating the industry for the high cost of electricity caused by the imposition of climate change policies.

“Government can also help ease the burden of business rates for this important strategic industry, where steel companies pay five to ten times more than their competitors in France and Germany.

Stace added: “Sympathy and warm words are welcome, but Ministers must now get behind British steel and deliver the support that we urgently need. The consequences of inaction would be very serious indeed both for steel, the wider economy and jobs.

”The Chancellor and Ministers apparently discussed the issue of Chinese dumping of steel on their recent week-long visit. I would like to know exactly what the response of the Chinese was and what ministers achieved?

“Government must also press the EU to look at all instances of illegal dumping and the potential breach of EU trade rules. So far the European Commission has been very slow to react to this problem.”