UK steelmakers are demanding that business secretary Sajid Javid presses for an immediate halt to dumping of Chinese steel at a crunch Brussels summit today.
The steel industry is buckling under a full-blown crisis amid an influx of cheap Chinese steel imports, which is intensifying pressure from high energy costs and onerous taxes.
Almost 5,000 British jobs have been lost at Tata Steel, SSI and Caparo Industries in recent weeks, as the sector fights for survival. The Sunday Telegraph revealed that Tata’s problems are so acute that it is demanding suppliers cut prices by 30pc.
The crisis is threatening to spread even further, amid reports that Sheffield Forgemasters, the maker of the Iraqi “super gun”, is seeking external investment to bolster its finances.
Steelmakers hope today’s crisis talks in Brussels will see co-ordinated action to stop China’s state-backed steel-makers flooding Europe with excess production as the Chinese economy slows.
The meeting – called by Business Secretary Sajid Javid – will see the minister come together with his European counterparts to discuss how to tackle mounting problems.
Trade body UK Steel is demanding the EU acts quickly and decisively to block Chinese steel imports.
“The US and other countries have already moved to prevent cheap Chinese imports distorting their markets and now the EU must do the same – and quickly,” said Gareth Stace, director of UK Steel. “The UK must seize the moment and encourage a rapid response in Brussels if we’re to prevent large scale problems for steelmakers spreading in Britain and across Europe.”
UK Steel criticised the EU’s slow action in tackling the issue, claiming it can take a year to enact measures, compared with just weeks in the US.
Even high-end steel businesses such as Forgemasters, which make parts for Roll-Royce’s nuclear reactors found in Royal Navy submarines, are being hit by the crisis.
Forgemasters is best known for its involvement in the 1990 super-gun scandal when it thought it was making pipes for an oil project. It was later the subject of a politcal row over an £80m loan pledged by Labour, which was eventually halted by the coalition government.
The company, which has 760 employees and an annual turnoverof about £80m, has confirmed it is in talks about possible new investors. However, there is no suggestion it is facing the kind of difficulties that could cause it to fail. A Chinese steel company backed by Beijing is reported to be among the potential investors, raising concerns about sensitive defence contracts.
The company is also understood to have engaged KPMG to explore strategic options. Although Forgemasters' holding company has not filed accounts for two years, publication of its results are said to be “imminent” and are currently in audit.
Graham Honeyman, Forgemasters chief executive, said: “We have been in discussions with a view to securing new business and potential external investment as part of a long-term business development strategy.
“Despite challenging trading conditions which have affected the industry worldwide, the company remains financially stable and continues to win notable orders in defence, power generation, manufacturing and offshore sectors.”
The developments came as former Rangers football team owner Sir David Murray offered a ray of hope to the 270 staff set to lose their jobs as Tata closes two Scottish plants as a result of the crisis.
The businessman, who formed Murray International Metals while in his early 20s, said he had held talks with Tata about the plants’ future.
"Having been involved in the industry for more than 40 years - and the plant at Dalzell is one of my main suppliers - it is obvious that I would be concerned, as both a customer and as an employer, over what I could do to assist in helping to preserve such iconic brands," Sir David said, but warned: “No one should underestimate the gravity of the difficult challenges that lie ahead.
