India-based Tata Steel has decided to cut down jobs by 1,050 including 750 at Port Talbot in the UK. The cheaper imports from China and drop in steel prices across the Europe are the main reasons behind the decision of Tata Steel to trim its headcount.
According to Tata Steel, 100 jobs would be slashed down in mills in Trostre, Corby and Hartlepool. The supporting jobs would also be removed to the tune of 200 at this facility. Tata Steel has urged European Commission to take action against 'unfair trade' imports.
Tata Steel is slashing 750 jobs at the strip-products plant at Port Talbot. It has 4,000 workers and is the biggest steel plant in the UK. The plant is suffering loss of £1million per day.
BBC reports that the prevailing steel prices are at very low impacting the operational margins for steel firms. Adding to this, cheaper imports are making the situation further worse. Tata Steel in a statement said: "The plans are a result of falling European steel prices caused by a flood of cheap imports particularly from China."
Tata Steel is the second largest steel producer after Arcelor Mittal SA in the Europe. Karl Koehler, Chief Executive for European operations at Tata Steel, said: "We need the European Commission to accelerate its response to unfairly traded imports and increase the robustness of its actions. Not doing so threatens the future of the entire European steel industry."
The Wall Street Journal (WSJ) reports that so-called green taxes on electricity tariff and drop in steel demand are taking a toll on the Britain steel industry. Several steel companies are suffering from losses and started filing for bankruptcy.
For instance, London-based Caparo Industries Plc has commenced bankruptcy proceedings in October 2015. It has 1,700 staff and filed for bankruptcy for 16 of its 20 steel businesses. Thailand-based Sahaviriya Steel Industries has already announced its plans to close down steel plant in Redcar, Northern England, and this will result in loss of 1,700 jobs.
Tatas previously already announced hundreds of job cuts in the UK operations. Expressing concerns over the adverse conditions in the steel industry, trade unions and industry representatives have requested the UK government to extend support to revive it.
Koehler further added: "I know this news will be unsettling for all those affected, but these tough actions are critical in the face of extremely difficult market conditions which are expected to continue for the foreseeable future. UK must take stronger action against unfair steel imports," as reported by City A.M.
Trade unions have also urged the government to take some against Chinese steel imports. UK steel industry officials say that Chinese imports are at artificially low prices.
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