UK steel industry in crisis says minister, promises to lobby China

18 September 2015

Britain's steel industry is in crisis, the government said on Thursday during a debate on the sector, promising to talk to China about concerns it is forcing manufacturers out of business by flooding the market with cheap products.

Producing steel profitably in Britain has become increasingly difficult due to cheap imports and a strong currency, plus relatively high energy costs and "green" taxes imposed on heavy industry.

On Thursday, lawmaker Anna Turley who represents thousands of workers at threatened steelmaker SSI UK, said the industry was at a crisis point due to falling global steel prices

"I wish she weren't right but she is right - it's in crisis," government minister Anna Soubry said in response to Turley during the parliamentary debate.

Media reports have said some 2,000 jobs are directly at risk at SSI UK, a unit of Thailand's Sahaviriya Steel Industries (SSI) (SSI.BK), after the company missed several debt repayments.

Soubry said the government was doing all it could to help the sector, but that its hands were tied by strict European Union state-aid rules and commitments to produce electricity in an environmentally friendly way, not just as cheaply as possible.

But she promised to raise allegations of "dumping" by Chinese firms - where products are sold at below fair value, depressing prices worldwide - when she travels to China next week as party of a British trade delegation.

"We want to talk to them about dumping, we want to talk to them about production and we want to talk to them about the future of their own steel industry," Soubry said.

In August, the U.S. Commerce Department said China was dumping steel shelving units in the U.S. market at below fair value and unfairly subsidizing the producers. It said China was dumping the products at margins of up to 112.68 percent, with subsidies ranging as high as 80.45 percent.