Why the British steel industry is fighting for survival
As a consequence of China’s dominance in the global steel market, there is likely to be a significant and long-lasting impact on the steel industry in Britain and the associated supply chain. But just how exactly has it come to this?
In the first six months of 2015, China was responsible for around 28% of the world’s steel manufacture, and has started flooding the market with cheap, subsidised steel which it no longer requires, ever since the country’s economic growth has been slowing up over the past 18 months.
This oversupply of steel to the global markets, along with now increased competition from other steel manufacturers throughout the EU, has resulted in the British steel industry fighting for its survival against a unique array of trading conditions.
The TATA Group, as well as Sahaviriya Steel Industries (SSI), based in Teesside, have already reported huge losses that have resulted in the closure of plants and the loss of many jobs. There was a special scene at Old Trafford on Wednesday night as thousands of visiting Middlesbrough fans took part in a light display in the 10th minute of their cup tie against Manchester United in support of the town’s steel workers.
Image from www.metro.co.uk.
An opportunity missed
Manufacturers in Britain were hoping that the Government would address the issue of China selling its oversupply of steel in the global market during President Xi Jinping’s recent visit. And while Prime Minister David Cameron has since suggested that the visit by Xi Jingping will result in up to £40 billion of trade and investment, this may prove little consolation to those most affected.
With no new measures announced by the Government to support the industry so far, the impact is likely to be felt most by the employees and the SME’s that have historically supported the British steel industry. As of today, around 1,700 redundancies have been announced, with further job losses likely to follow.
Have you been affected by the recent redundancies in the British steel industry? Please share your story in the comments below.
All affected businesses will need to consider their options with the appropriate professional advisors to ensure that they protect their interests, and this is where Harrison Drury can help.
Our experienced team of manufacturing and engineering lawyers can assist you with finding the right solution for your business, whether this concerns redundancy processes, increased pressures resulting from reduced turnover and cash flow, finding new markets or clients, diversifying products or services, and insolvency. Get in touch today on 01772 258321.
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