Around 18,000 people are directly employed in Britain's steel sector, of which 15,000 are employed by Tata Steel. But the Indian steelmaker announced plans to sell its entire UK operations late last month, putting those jobs at risk.
Tata's move to sell its business followed an announcement at the beginning of this year that it would axe 1,050 jobs, on top of 1,200 that were cut in October 2015 and 700 last summer. Two other foreign companies had already orchestrated exits: Thailand's SSI is closing its Redcar works and Caparo Industries' steel operations went into administration.
Tata started the formal sales process of its loss-making plants in Scunthorpe and Port Talbot on Monday. Greybull Capital announced it would buy the company's Scunthorpe plant in a process expected to go through within eight weeks. The government said on Tuesday that it might consider being a co-investor in the steel facilities in a desperate attempt to keep the industry afloat.
It has become hard to believe the UK was the initiator of mass steel consumption. The UK steel sector has been hit by a combination of factors including high national energy prices and the extra cost of climate change policies.
The cause of the global steel crisis links back to China. In the early 2000s, China accounted for roughly a fifth of worldwide steel supply, at which time it was also a major consumer. Fast forward to 2015, China produced almost half (around 49 per cent) of all steel, while its steel consumption plummeted. Global demand for steel was hit hard by the financial crisis and is set to grow less than one per cent in 2016. Other markets were flooded by cheap Chinese steel, and have struggled to recover as a result. This week, China warned that its steel industry would remain oversupplied despite efforts to restructure the sector.
Europe has mostly suffered in kind with Britain, with stark competition weighing on the industry and driving job losses.
"Last year, there were 328,000 employees in the sector, however, in the second half of 2015 alone there were at least 7,000 further losses," a spokesperson for Eurofer, the European steel association, said.
"As in 2014, steel demand rose in the EU in 2015. Indeed, apparent consumption in the EU grew by about 3.5 per cent over the year. However, this increase in demand was entirely absorbed by imports."
The only global bright spot for steel at present is India. According to figures from BMI research, India's steel output is set to average annual growth of 7.3 per cent from 2016 to 2020.
Mitchell Hugers, commodities strategist at BMI Research, said: "India will be a global hot spot for both production and consumption of steel in the coming years. From a supply side perspective, the government has been spearheading the push towards the boost in steel production capacity, with upgrades being made to existing steel mills and state-owned companies stepping in to build new steel plants. The key reason for this a continued acceleration of demand from the construction, automotive and infrastructure industries."
What of the UK? "We would [like] to see more government action to bridge the gap on electricity cost with competitors, business rates and to provide direct financial assistance to steel companies to further improve both energy efficiency and also productivity, are all measures that will help our sector fairly compete," Gareth Stace, the director of the UK's steel industry association, UK Steel, said.