Tata Steel Europe, the European unit of the India-based steel giant Tata Steel, has announced proposals to stop production of steel plate. The company stated that it has been forced to make changes to its European long products business in response to a shift in market conditions caused by a flood of cheap imports, particularly from China, a strong pound and high electricity costs.
According to Tata Steel Europe, 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.
The proposed changes would lead to around 1,200 job losses, about 900 in Scunthorpe and 270 in Scotland as well as a small number at other European long product sites. Plate mills in Scunthorpe, Dalzell and Clydebridge would be mothballed, while one of the two coke ovens at the Scunthorpe steelworks would be closed.
“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,” stated Karl Koehler, the CEO of Tata Steel’s European operations.