Steel crisis will hit ‘entire supply chain’

Tata steel works, Scunthorpe, Lincolnshire.
Tata steel works, Scunthorpe, Lincolnshire.
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Thousands more steel industry jobs could go if the government fails to address the threats facing Britain’s vulnerable steel supply chain, a trade group warned.

Scores of medium-sized, independent businesses could be at risk if the crisis escalates, according to the International Steel Trade Association.

The threat to jobs will come if suppliers can no longer purchase steel competitively from their chosen supplier.

This would create an ‘artificial market’, said ISTA Chairman Jeffrey Kabel, creating distortions in a sector already hit by wild swings in global prices for steel products.

The government needs to address the issue of plant closures, Chinese imports, energy costs, business rates and product quality as part of wider, coordinated strategy, he added.

“As a result of devastating news at Redcar, Scunthorpe, Rotherham and elsewhere there is now a real risk to sectors including major infrastructure projects, hi-tech manufacturers such as aviation and defence and automotive and traditional markets such as construction,” he said.

“There is an escalating threat which is moving rapidly along the supply chain. We are not talking here solely about giant manufacturing facilities in close-knit communities, or the steel belt in Scotland and the Midlands, but small and medium-sized firms scattered across industrial estates, town-centre office buildings and ports nationwide.

“These are the steel products traders, shippers and distributors who feed their customers with high quality steel and bespoke products, which are the lifeblood of so many manufacturing and infrastructure projects.”

Big construction firms have already begun to shun products sourced from China and other markets. “This hits confidence in the supply chain, once you question the integrity of materials, distortions start to kick in. We are concerned that an artificial market is taking shape, the next step is protectionism and we will see the beginning of the end of a free market in steel products.”