Originally Posted by
BetterTogether
Imagine that a private business that isn't competitive and unable to keep up plummeting world prices going out of business and not being propped up by the government.
Its really complicated this one, the owners are not British they are a Thai company Sahaviriya Steel Industries who bought the plant ( from TATA steel in 2011 ) and poured money in including 469 millions for Redcar, hence ran up a huge debt which they couldnt service due to plummetting steel prices caused by a world wide over production, mostly from China. Flooding the market with cheap Chinese product ( China needs foriegn trade / currency as they are moving are in a slow down ) has forced the price of slab steel down by 45% in just 12 months, from $500 (£330) a tonne to about $280. If they hadnt bought the plant from TATA steel then in all inevitability the plant would have been either closed or slimmed down by TATA. The Thai banks wont give any wriggle room to the owners ( delayed repayment schedules ) hence they cannot operate at market prices, common sense, whats the point in producing steel and stockpiling it when there is an over supply and the debts wont go away. Worryingly TATA steel, owned by an indian company one of the UK's biggest steel manufacturers has been trying to sell off the works at Shorpe. ONly hope is to keep the assetts with a skeleton workforce until steel prices rise, but that would mean waiting for a global cut in steel production which given Chinese economic situation wont happen. Union argements are the costs of unemployment and cleaning up the site ( if de commissioned ) would run into hundreds of millions hence arguement is to keep the assests. That would have to mean that the UK government would buy the plant / pay the debt, effectively nationalise the plant,and keep it mothballed with a skeleton staff but in a climate where steel prices are low they could be accused of throwing good money after bad. A real mess but caused by debts and external global issues which wont go away.
The UK continues to be at a disadvantage because of high energy costs, compounded by environmental levies which are not faced by competitors in Europe....TATA steel Shorpe was going be bough ( 2015 ) t by an American industrialist group headed by Gary Klesh who has now pulled out of the deal leaving 4,000 jobs at Shorpe under threat.... in an interview with the Financial Times, Gary Klesch, the head of the group, said he was withdrawing in frustration at the government’s apparent lack of interest in old-economy industries.“What is the industrial policy when it comes to energy or when it comes to the massive dumping of cheap Chinese steel?”
No one seems to care... The industrial side is hurting. If it was important to them to ensure those jobs were saved they would figure it out.''– Gary Klesch, speaking to the Financial Times
Mr Klesch added that steel workers were “being led to the slaughterhouse” by ministers’ failure to tackle energy costs and Chinese imports.
A spokesman for the Klesch Group confirmed that the company is no longer in talks with Tata about the possible purchase of the steel works.
Government can listen to the guy and tackle high energy costs and streamllne environmental levies...this will not save Redcar at all as teHE situation is beyond resolution..... but gee if Sghorpe goes we will be importing most of our steel from China, the end of UK steel ??? The Northern Powerhouse.........
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