Fears for all South Yorkshire steel jobs as crisis bites

Protesters outside Tata in Scunthorpe
Protesters outside Tata in Scunthorpe
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Crisis-hit Tata steel will still employ 1,500 people in South Yorkshire despite a huge round of redundancies - but the Government must act swiftly or they will be at risk too, experts say.

Gareth Stace, director of industry body UK Steel, said he was “fearful” for the rest of the steel sector if ministers failed to keep promises to cut energy costs.

Tata Steel site at Thrybergh, Rotherham

Tata Steel site at Thrybergh, Rotherham

He spoke after Tata Steel announced 1,200 job losses, 900 in Scunthorpe and 270 in Scotland.

A day earlier, Caparo, in the West Midlands, announced it was going into administration, placing 1,700 jobs at risk.

Tata announced in summer it would make 550 South Yorkshire workers redundant, out of a total of 720 nationally, while SSI on Teesside shut down in September with the loss of 2,200 jobs.

Steel bosses are calling for a compensation package for energy intensive users to be implemented in full, to level the playing field with plants in Germany.

The sector has also been badly hit by the dumping of cheap steel by the Chinese and a strong pound hitting exports.

Tata Steel says it is focusing on speciality steels for the automotive and aerospace sector.

But Mr Stace said: “You would hope that sector is slightly more shielded from the tsunami of Chinese imports. But we have to see urgent action from government. If not, I’m fearful for all the parts of the steel sector.”

Tata has electric arc furnaces making steel from scrap at Thrybergh in Rotherham. Stocksbridge remelts and rolls steel used in safety critical applications including automotive, aerospace and oil and gas, while Brinsworth is home to a narrow strip mill. The Indian-owned company also has the Swinden Technology Centre in Rotherham and the Proving Factory - a new machining division on the Advanced Manufacturing Park, also in the borough. In total they employ 1,500 people.

Business Secretary Sajid Javid promised to look at ways to help British steelmakers benefit from the Government’s investment in major infrastructure and hinted ministers may look at cutting business rates and energy costs for steelmakers.

Mr Javid also claimed the EU Commission had been slow to approve support which requires clearance under state aid roles.

But he warned there were limits to the help the Government could offer.

He said: “Excess capacity in global steel is enormous – more than 570 million tonnes last year, almost 50 times the UK’s annual production.

“The price of steel slab has halved in the past year alone and in the three years since SSI restarted production at Redcar, the plant has lost more than £600 million.

“There are limits to what the Government can do in response - no Government can change the price of steel in the global market or dictate foreign exchange rates.”