UK steel industry affected by cheap products from China

The slowdown in China’s economy has created an avalanche of cheap steel products, which have entered the UK market. Which could lead to additional factory closures, such as the SSI UK in Redcar.

The steel industry in the UK has been collapsing for years: slowing demand and a wave of cheap steel from China have contributed to this situation. About half of the 1.6 billion tons of steel made globally each year now come from China.

The flooding of the market with cheap products from China has forced the price of steel plates to drop by 45%. In just 12 months, from $500 (£330) per tonne to around $280.

Steel exports from China are increasing because they sell much cheaper products

As a result, steel exports from China increased by 53% in the last year. In Great Britain, steel imports from China increased from 2% in 2011 to 8% this year.

The second largest steel producer in Great Britain has confirmed the cutting of 1,700 jobs. Also, the preservation of his factory in Redcar (Teesside region).

SSI UK, owned by the Thai company Shaviriya Steel Industries (SSI), is the most important victim of the invasion of the market with cheap steel from China. It collapsed under the weight of debts of 1.4 billion dollars. The Teesside factory has racked up huge losses every year since 2011, when SSI bought it from Tata Steel.

Tata Steel Great Britain, which owns the remnants of the former British Steel, is struggling with the same problem caused by China.

The losses of the largest steel producer in the country have doubled since last year. Dad responded by cutting jobs, going into conservation at the plant in Llanwern, South Wales, and had an unsuccessful attempt to sell the Scunthorpe steelworks to Gary Klesch, the billionaire industrialist who owns the global industrial goods group Klesch.

Scunthorpe steelworks, which produces steel for the construction and automotive sectors, is expected to be the sector’s next victim.

It is a grim reality for a once proud sector that is at the center of the industrial revolution.

Article source: http://www.theguardian.com/business/2015/sep/28/british-steel-industry-buckles-under-weight-cheap-chinese-product-ssi-redcar