Bri­tish steel sec­tor ‘at risk of im­pend­ing col­lapse’

The Pak Banker - - MARKETS/SPORTS -

The steel in­dus­try in Bri­tain and Europe faces a "sig­nif­i­cant and im­pend­ing risk of col­lapse", busi­ness min­is­ters have warned in a let­ter to Euro­pean Com­mis­sion­ers de­mand­ing ac­tion to save steel mak­ers.

Min­is­ters in­clud­ing Sa­jid Javid, the UK Busi­ness Sec­re­tary, and his coun­ter­parts from France, Italy, Ger­many and Poland have writ­ten to the EC spell­ing out the dan­gers that im­ports of sub­sidised Chi­nese steel pose to the in­dus­try, and call­ing for the rapid in­tro­duc­tion of anti-dump­ing mea­sures.

The let­ter, seen by The Daily Tele­graph, ap­peals for the Com­mis­sion to "use ev­ery means avail­able and take strong ac­tion". The EU "can­not re­main pas­sive when ris­ing job losses and steel­works clo­sures show there is a sig­nif­i­cant and im­pend­ing risk of col­lapse in the Euro­pean steel sec­tor", the let­ter said.

Bri­tain's steel in­dus­try is in the grip of an un­prece­dented cri­sis, with the loss of more than 5,000 jobs since the sum­mer. UK pro­duc­ers say they can­not com­pete with cheap steel from China flood­ing the mar­ket. They also claim to have been harder hit than Euro­pean ri­vals be­cause of higher costs and taxes.

In­dus­try gi­ant Tata has an­nounced more than 2,000 re­dun­dan­cies at its UK steel mills, SSI's Red­car plant col­lapsed into ad­min­is­tra­tion in Oc­to­ber with more than 2,000 job losses, and other smaller com­pa­nies and sup­pli­ers have also slashed jobs.

In the let­ter, min­is­ters call for the EC to speed up in­ves­ti­ga­tions be­fore they in­tro­duce anti-dump­ing mea­sures that put a tar­iff on sub­sidised steel im­ports which al­low non-EU pro­duc­ers to run at a loss.

It adds: "We should not wait un­til the dam­age from un­fair prac­tices be­comes ir­re­versible for our in­dus­try. The Com­mis­sion should be pre­pared to open in­ves­ti­ga­tions ex of­fi­cio and to set up mea­sures on the grounds of the 'threat of in­jury' where the ev­i­dence jus­ti­fies this. The Com­mis­sion should also quicken the pace of in­ves­ti­ga­tions be­fore im­pos­ing trade de­fence mea­sures."

Mr Javid, who has been at the fore­front of the cam­paign to gain re­lief for the steel in­dus­try, has signed the let­ter in an ex­pres­sion of what sources de­scribe as his "frus- tra­tion" at the slow speed of the EC's ac­tions.

Min­is­ters also use the let­ter to call for Euro­pean-level sup­port for en­ergy in­ten­sive in­dus­tries such as steel­mak­ing, giv­ing re­lief on car­bon taxes to the most ef­fi­cient plants, and aid to help de­velop new steel pro­cesses and tech­nolo­gies. The Bri­tish trade as­so­ci­a­tion, UK Steel, said it was en­cour­aged by the let­ter.

"This is ex­actly what we have been call­ing for, with EU mem­ber states press­ing the Com­mis­sion for ac­tion," said Gareth Stace, di­rec­tor of the body. "It shows mem­ber states un­der­stand the se­ri­ous­ness of the cri­sis the steel in­dus­try is fac­ing and are press­ing Brus­sels bu­reau­crats for ac­tion."

Data pro­duced by the In­ter­na­tional Steel Sta­tis­tics Bureau fore­casts a "dire" year for steel pro­duc­tion in the UK, with a plunge of 20pc pre­dicted to be the low­est level on record.

UK Steel hit out at trade tar­iffs im­posed on im­ports of Chi­nese "re­bar" steel used to re­in­force con­crete last month, say­ing the levies showed that Euro­pean com­mis­sion­ers did not un­der­stand the scale of the cri­sis.

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