Should the government do more to help the steel industry or....

[Danthus]

Should we just allow market forces prevail?

With the recent news regarding SSI shutting the plant in Redcar and the announcement that TATA will be cutting 1200 jobs in the UK should the government do more to support the steel industry?

A quick read up on on the subject and there are lots of pressures on producing steel in this country from energy costs and also business rates.

Should they be given relief from these factors?

 

[Tefal]

depends on what part of it, mass producing cheap steel inst something we can compete with again. but maybe the government investing in a forging company or specialist engineering alloy production company to allow us to do even larger scale reactor components/vessels could be an excellent idea.

especial when at the upper end of the scale there is only Japan steel that can make stuff.

 

[[FnG]magnolia]

New Steel vs Old Coal

I'm hoping you are aware of how indirectly funny this is.

 

[MissChief]

Massive oversupply since China cut back on the frankly ludicrous amount of new buildings they were throwing up without tenants or buyers. Market forces at work.

 

[dante6491]

Part of the reason it is uncompetitive is high energy prices. The massive investment in green energy has caused high electricity costs. Invest in Nuclear and Shale, lower energy prices and heavy industry will come back. We have the skills, but it just costs too much to make here.

 

[Abraxaz1]

depends on what part of it, mass producing cheap steel inst something we can compete with again. but maybe the government investing in a forging company or specialist engineering alloy production company to allow us to do even larger scale reactor components/vessels could be an excellent idea.

especial when at the upper end of the scale there is only Japan steel that can make stuff.

You do realise that the same company can make the same cheap crap that Chinese can make one blow and the high end alloy steel the next.
The main issue with steel making in the UK is chronic under investment, most of the steelworks are being run with modified old technology by companies wanting to make a maximum profit, this comes from foreign companies buying the order books of British companies.

The annoying thing is that the government is so adamant that it won't help but the rest of Europe is bending over backwards to support their steel industry. Accormital gets energy tariffs from the German government but ours raises them every year.

End of the day the steel works are in labour strongholds so the Tories won't give a ****, once the close they will be replaced by low skilled service sector jobs.

I know for a fact if the steel works in port talbot closes most of the younger skilled craftsmen will leave the country.


The Tories closed the pits
They closed the British car industry
They sold of the trains to their mates
They sold of the energy and water companies
And now they are destroying the steel industry.



I wonder how much money passed hands on the trip to sell the British infrastructure to the Chinese....

 

[daver]

Part of the reason it is uncompetitive is high energy prices. The massive investment in green energy has caused high electricity costs. Invest in Nuclear and Shale, lower energy prices and heavy industry will come back. We have the skills, but it just costs too much to make here.

Yeah I'm really not sure energy prices are the problem. Working in a similar industry(bronze rather than steel), energy is about 5% of our cost base, labour is about 25%. Businesses in the UK need to specialize on complicated stuff, just can't compete on the easy to make stuff.

 

[dante6491]

The Tories closed the pits
They closed the British car industry
They sold of the trains to their mates
They sold of the energy and water companies
And now they are destroying the steel industry.

I wonder how much money passed hands on the trip to sell the British infrastructure to the Chinese....

We live in a Globalised, liberalised, economy now. The liberalism which allows foreign companies to invest in ours, let us invest in theirs. The issue is, on a whole, we do not like investing, at a government or individual basis. There is nothing stopping you buying shares in a foreign company.

 

[Danthus]

We live in a Globalised, liberalised, economy now. The liberalism which allows foreign companies to invest in ours, let us invest in theirs. The issue is, on a whole, we do not like investing, at a government or individual basis. There is nothing stopping you buying shares in a foreign company.

Pretty sure France stop foreign companies buying up their companies.

 

[Abraxaz1]

Yeah I'm really not sure energy prices are the problem. Working in a similar industry(bronze rather than steel), energy is about 5% of our cost base, labour is about 25%. Businesses in the UK need to specialize on complicated stuff, just can't compete on the easy to make stuff.

You are forgetting the amount of energy required, most steel works are made up of the following:
Coke ovens, which have chargers,guides,off take fans and cooling system.
Sinter plants,
Blast furnaces
Basic oxygen steel making, which has about 7 plants inside it.
Continuous casting
Hotmill
Cold mill
CAPL
Zodiac
Plus all the secondary process
This means the energy draw is massive.

But the real killer is the cabon dioxide tax, nearly all the process that make steel produce co2 which is taxed heavily.

 

[jaws104]

I would say no, long-term it's just going to die out so why should the UK government prop it up? Ship cheap steel in from the far east and focus on investing in & creating high skilled & technical UK based manufactures that will need that steel.

 

[SexyGreyFox]

Over 2500 people lost their jobs at Creda/Hotpoint when Merloni took over and it wasn't even reported on the News so for that reason I'm out of empathy.

 

[Tefal]

You do realise that the same company can make the same cheap crap that Chinese can make one blow and the high end alloy steel the next.

not really, if you're geared up for massive production you're hardly going to use all you're equipment well below capacity for specialist orders.

and its definitely the large forging and high end vessels etc we should be chasing given we make a lot of reactor components as it is but newer types all have to be farmed out to Japan steel because they're the only place big enough.

 

[Abraxaz1]

not really, if you're geared up for massive production you're hardly going to use all you're equipment well below capacity for specialist orders.

and its definitely the large forging and high end vessels etc we should be chasing given we make a lot of reactor components as it is but newer types all have to be farmed out to Japan steel because they're the only place big enough.

That's odd as port Talbot often makes the high silicone steels that you mention as well as the crap grades, in fact port Talbot is one of the few plants that's making both the low weight high strength steels for car manufacturers and the button proof steel for the army's latest viechles.

Here's an idea how about don't argue the technical points about steel making with the guy that has kept one part of the steel works open for the last 10 years.

The steel works in this country were run at the lowest possible cost for the last 15 years by forgien companies.

If they are going to survive then the government needs to lower energy cost and carbon dioxide taxs.

But they won't,

I wonder how long before all the car manufactures leave for the continent as they all buy their steel from port Talbot. If that closes it'll be cheaper to manufacture in eastern Europe.

 

[Dolph]

Prices are falling because of overproduction worldwide. There would be no support for the government changing the working and reward practices at the steel plants to make them much more cost effective, so the idea is a non starter.

 

[scorza]

Fair do's - that's all the British people ever ask for. No-one wants the steel industry put on state-sponsored life support, but we do want protection from unfair trading practices from our competitors. Why do we not get this protection? well the UK isn't in charge of our own trade laws anymore - we've given those away to Brussels, and you have to wonder whether the EU are going to give a damn about British steel workers when German car manufacturers are benefiting from China dumping a load of cheap steel on Europe to lower the overall price.

 

[PlacidCasual]

The increasing levels of mechanisation and automation in process industries as actually been eroding the cheap labour part of the equation for years. With all other thiings being equal there are good reasons to onshore tese industries, the US is a good example following the shale revolution. Sadly we have pursued a high energy cost policy for a decade now. The ill considered green taxes and additional costs on energy suppliers are putting UK businesses out of business. We should be following an aggresive low cost energy policy and onshore the jobs, it's the start of a virtuous circle which will bring back highly skilled jobs and revitailise communities. Our obsession with throwing money at the poor so they can by chinese mass produced crap instead of creating th conditions to give them jobs irks me.

So yes we should save UK steel, but by sorting out everything else that makes it attractive to own, operate and invest in steel production in the UK. Energy cost, planning rules, green taxes.

 

[Abraxaz1]

Prices are falling because of overproduction worldwide. There would be no support for the government changing the working and reward practices at the steel plants to make them much more cost effective, so the idea is a non starter.

The problem is making steel is not energy efficient, the amount of energy is converting iron to steel is rediculas, looking at around 3-15000cm3 per blow. Depending on carbon content.
We already harness the excess heat which is turned into steam and powers steam turbines.
We already collect the carbon monoxide that is inturn used as a fuel in turbines.

If tata actually in vested in the following we would be breaking profit targets and producing steel no else could.

* new coke ovens with by products section, the one at port Talbot was produced in the 70s . if we had that more coke oven gas would be produced and we wouldn't have to import natural gas. Also we could properly harness the following more regularly.
- tar used for road construction £2000+ per container
- ammonia used in medicinal and fertiliser £ 1000 per tanker
- benzine used in fuel £10,000 per tanker
- naptheline £7000 a tanker
With a new by products section we can produce the above amount 3-5 times a week which pays for the wages of that part of plant.
* refurbished and third vessel added to primary side of bos plant as this is the bottle kneck of the entire chain.
* new secondary steel units as they haven't been upgraded since the 80s
* new hot mill as it can only roll 1800 mm instead of the 2600 mm car manufacturers are asking for. It would cost £200mil but would make its money back in new orders and less maintence in less than 5 years.
* new power plant as most of the steam and gas produced on site is going to waste.

Like I said the main issue is chronic lack of investment

We have proven we can produce the high quality steel but have our hands tied by government regulations and forgien owners

 

[Dis86]

Guess I'll have to buy all my steel from the Germans now!

 

[alx]

Are CO2 taxes something the UK government can alter or is it governed by the EU? Problem with CO2 taxes is that they're very politically sensitive as it's linked to global warming.