steel shortage hits industry


The price of steel has risen approximately £200 a ton since December 2003, doubling in the last year and now at a 30-year high. Steel mills and steel suppliers across Britain and Europe are facing ever increasing steel shortages.

According to the Engineering Employers Federation and its associate UK Steel this is apparently due to the demand for steel from China and the shortage of coke and recyclable metals.

Corus, the Anglo-Dutch steel company, which supports this view, has stated that it "could be in a situation where we cannot supply as much steel as we'd like". Riva, the largest Italian steel producer, and Arcelor, the world's largest steel producer — 44 million tonnes versus Corus's 220,000 tonnes, both implied coke shortages could halt production.

Within two days of this announcement Corus announced the closure of its heavy mill plant at Scunthorpe with the loss of 240 jobs. The closure sees Corus withdraw from sheet-piling in favour of Arcelor.

Investment in Scunthorpe is to continue in the production of rod and plate products but it seems ever so convenient that such a restructuring, with a rationalisation and division of the industry into spheres of influence, has taken place. Or does the demand for steel in China justify the operations of cartels in production? Arcelor signed a massive $800 million agreement with China in December 2003.

The loss of manufacturing jobs in Britain is running at approximately 3000 a week, the highest weekly figure ever. Britain probably leads in Europe on the recycling of metal and yet the shortage of steel could lead to a worsening of the difficulties faced by manufacturing industry.