UK steel industry: What’s wrong?

Over the past few months, one part of the U.K. economy, the steel industry, has grabbed the headlines, but for the wrong reasons.

The announcement that the Indian manufacturer Tata Steel plans to sell its loss-making UK factories, putting thousands of jobs at risk, is the latest and most devastating blow to the British steel industry.

What are the irregularities in the steel industry in the U.K

What is behind the current crisis?

The steel industry says it has been hit by a combination of factors: relatively high electricity prices, the added cost of climate change policies and unfair competition from China – there have been allegations that Chinese steel is being sold in the UK at unrealistically low prices .

With the economies – especially the Chinese one – still seeing weak growth, the global demand for steel is expected to remain slow. After the decrease of 1.7% in 2015, an increase of 0.7% is expected in 2016.

Global steel prices have fallen sharply. Meanwhile, China’s own economic slowdown has led Chinese manufacturers to look for export markets. Because their domestic demand has stagnated.

How important is steel to the UK?

Steel itself is vital to almost everything we use. Whether it’s buildings, clothes, cars or cans of drinks – everything depends on him at a given moment.

Almost 20,000 people are directly employed in the Brianica steel industry. But in addition to the job losses already announced, there will be an impact in other related sectors.

What can the government do?

The industry is clear about what it needs: a relaxation of carbon emission targets for manufacturers. Also, higher compensations for high energy prices. As well as a firm commitment that British steel will be used in major construction projects.

„We need to see the government and the European Commission act quickly,” Gareth Stace, director of U.K. Steel, told the BBC.

Article source: http://www.bbc.com/news/business-34581945