Tata Steel confirms 1,200 job cuts in Scunthorpe and Scotland

 
Jessica Morris
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Global demand for steel is expected to remain muted (Source: Getty)

Britain's biggest steelmaker, Tata Steel, has confirmed 1,200 job cuts at sites, blaming a flood of cheap imports, particularly from China.

Around 900 jobs will go in Scunthorpe and 270 in Scotland, as well as a small number at other sites across Europe, the company said in a statement today.

"I realise how distressing this news will be for all those affected. We have looked at all other options before proposing these changes," Karl Koehler, chief executive of Tata Steel’s European operations, said.

The steelmaker said its hand had been forced by cheap imports from Europe and China which depressed steel prices at home, the strong sterling which sapped demand for its exports to Europe and high electricity costs.

As such, it's moving towards higher-value markets, with a focus on developing stronger and lighter products.

Read more: Steelmaker Caparo set to go into administration

The news will add to mounting concerns that the UK steel industry is crumbling at the hands of Chinese manufacturers, as Chinese President Xi Jinping begins a four-day state visit to the UK.

Yesterday, steelmaker Caparo collapsed into administration, with the loss of 1,700 jobs. It follows the closure of the UK's second largest steelmaker, SSI steelworks in Redcar, which will lead to 2,200 job losses.

Ministers, companies and unions are currently holding a crisis meeting in Rotherham over the UK's remaining steel industry.

The UK steel industry has suffered as international competitors can manufacture steel at lower prices, at a time when global demand is also waning. Figures from World Steel have suggested global demand will remain muted, falling 1.7 per cent in 2015, with a 0.7 per cent rise in 2017.

Read more: Xi Jinping's visit overshadowed by UK steel concerns

"The UK steel industry is struggling for survival in the face of extremely challenging market conditions. This industry has a crucial role to play in rebalancing the UK economy, but we need a fairer system to encourage growth. The European Commission needs to do much more to deal with unfairly traded imports – inaction threatens the future of the entire European steel industry," Koehler added.

"In the past two years, imports of steel plate into Europe have doubled and imports from China have quadrupled, causing steel prices to fall steeply. At the same time, a stronger pound has undermined the competitiveness of the business’s Europe-bound exports, and encouraged more imports."

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