Steel summit to be held in face of crisis

Posted on 16 Oct 2015 by Fred Tongue

The Government is to meet with steel companies, unions and trade bodies in Rotherham today after the closure of SSI's Redcar plant.

Trade unions will meet with government representatives today to discuss ways to salvage the UK steel industry after the closure of the Redcar plant in the North East that resulted in the loss of 1,700.

The issues rise in the midst of a slump in global steel. The demand for steel has fallen across the globe which has caused a prices to fall by half over the past year, Fluctuations in the yuan and rouble have also heaped further pressure on UK steel production.

Trade unions are expected to ask the Government for five immediate actions to help combat the issue:

  1. Help with energy prices for produces
  2. Back EU action on unfair imports and dumping practices
  3. Reform business rates
  4. Implementing regulations in a pragmatic way
  5. Support local content in major construction projects

The summit  aim to discuss global market trends and future prospects to help determine what can be done for the UK steel industry.

To be chaired by Business Secretary Sajid Javid, he commented: “This is a hugely difficult time for the steel industry across the world – one of the toughest times ever.

“It is a worldwide problem, and while it will not be solved overnight, we will work closely in partnership with the industry to help find some answers.

“There is no magic bullet and we can’t change the price of steel, but we can forensically work through all of the challenges we know the industry is facing to see what solutions there might be. We will also continue to do everything we can to support workers and to continue building a strong economy across the country.”

Director of UK Steel, Gareth Stace said: “Britain’s steel makers are facing the most intense crisis since the sector was privatised. We need all parties to come together now to bring forward solutions that will place the long term future of the sector on a sustainable footing.

“This isn’t about handouts, but giving the sector the opportunity to compete in this global market.”

Experts from EY and Oxford Economics will be also presenting at the meeting.

Mark Gregory, chief economist at EY noted: “The UK steel sector is facing a serious crisis. Mill closures and layoffs starkly illustrate the disconnect between the strength of the UK’s key domestic steel-consuming sectors and current levels of production.

“UK steel producers face a number of market and structural challenges, in part caused by slowing demand in China which has unleashed a flood of steel exports, leading to depressed prices and market distortions on a global scale. Now more than ever policy makers and industry leaders must work together.”

The UK steel industry employs around 30,000 people and in 2013 exported £4.9bn in value and made a £9.5bn contribution to the UK economy. Some of the other issues facing the steel industry is the rise of unfairly traded steel imports, a strong pound and uncompetitive policy costs.

In 2014 the excess steel capacity of China was about 340m tonnes, which is twice the amount of demand in the EU and 30 times higher than the UK’s production output for Steel which was 12.1m tonnes.