Cheap imports threatening Black Country, says steel boss

Tata Steel, which employs hundreds of people across the Black Country, has warned that cheap imports, particularly from China, 'risk undermining Europe's steel industry'.

A combination of the imports, the strength of the pound and high energy bills in the UK have combined in a triple whammy for the European arm of Tata Steel, which has around 17,000 British workers, leading to a sharp drop in turnover and earnings over the last three months.

Tata Steel Europe's turnover was down 11 per cent to £1.84 billion while earnings fell to a loss of £13m compared to the previous quarter's £30m profit.

Karl Koehler, chief executive of European operations for Indian-owned Tata Steel, said: "Market conditions have worsened this year.

"European steel demand is increasing modestly. But imports have grown much faster in recent years and risk undermining Europe's steel industry.

"Imports from China, in particular, have grown at an alarming rate – hot rolled coil shipments from China have been arriving at more than three times the volumes of 2013 – adversely affecting international steel prices.

"Surging imports constitute a threat to European steelmaking. Uncompetitive energy costs and the strength of sterling are hurting our UK operations. These three factors caused our first quarter financial performance to deteriorate, despite our more stable production platform as seen in our improved operating performance."

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As well as steelmaking operations in South Wales and on Teesside, the firm's major distribution centre is at the Steelpark in Wednesfield, where it employs around 600. It also has sites in Brierley Hill, Walsall and Wednesbury.

Tata has hived off its long products business at Scunthorpe, which makes rails and plates, into a separate business it is trying to sell and most recently revealed it was axing 720 jobs from its bright bar and speciality steel operation – including 35 in Wednesbury – as it concentrates on more profitable products.

The overall Tata Steel group saw first quarter turnover fall 17 per cent on the previous three months, to £3.03 billion, while its £76.3m pre-tax profits compared to its £613.9m loss in the previous quarter, boosted by the sale of some assets.

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