UK urged to 'spearhead European action' on steel dumping

Will Green is news editor of Supply Management
9 November 2015

Sajid Javid, UK business secretary, has been urged to “spearhead immediate European action” on Chinese steel imports as he meets with fellow EU trade ministers.

Javid, who is attending a meeting of the EU’s Competitiveness Council today, was told by industry body UK Steel to “press for immediate action to speed up efforts to prevent unfair dumping”.

Gareth Stace, director of UK Steel, said: “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 do so quickly.

“The UK must seize the moment and encourage a rapid response in Brussels if we’re to prevent large scale problems for steel makers spreading in Britain and across the continent.”

Among UK Steel’s demands are that local content should be supported in major construction projects.

Thousands of jobs have been lost in the UK steel industry in recent months, with low steel prices, over-capacity, exchange rates and cheaper Chinese imports being blamed.

Some 2,200 jobs have been lost following the closure of SSI steelworks in Redcar and 1,700 are at risk in the West Midlands as Caparo Industries enters administration.

Tata Steel’s Long Products Europe business, which has announced 1,200 job losses, has written to suppliers asking for price cuts of up to 30 per cent and suggesting firms face delisting, it was reported over the weekend.

The letter, signed by procurement director Lorraine Sawyer of Tata Steel Long Products Europe, calls for an immediate price cut of 10 per cent and a long-term price reduction of 30 per cent on all purchases.

A Tata Steel spokesman said: “Tata Steel's standalone Long Products Europe business has been in dialogue with suppliers using a number of methods for more than a month now.

“Initially some were spoken to directly while others were contacted by letter to begin a consultation process. The response has been overwhelmingly positive and we have already had excellent and innovative suggestions from suppliers as to how we can work together to protect supply chains and relationships in the future.

“The current position of the UK steel industry is no secret and has been explained in all communications with suppliers. We have been open about the challenges we face and wish to continue the dialogue we have initiated with suppliers as we look for better ways of working together.”

A spokesman for the Department of Business, Innovation and Skills said the department would be issuing a statement following Javid’s meeting. On 20 October Javid told the House of Commons action was being taken to support those who had lost jobs, but he added: “There are limits to what the government can do in response. No government can change the price of steel in the global market; no government can dictate foreign exchange rates; and no government can simply disregard international regulations on free trade and state aid – regulations that are regularly used to protect British workers and British industry.”

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