UK steel industry dies as new car production doubles

The demise of the UK steel industry looks strange against the backdrop of a resurgent auto industry that is breaking historic production records. The Society of Car Manufacturers and Traders in the UK predicts an annual production of over 2 million vehicles by 2020, a new all-time high since 1972, when the UK industry produced a record 1.92 million vehicles.

When Tata Steel bought Corus, Britain's second largest steelmaker in 2007, analysts predicted a “miraculous turnaround” in the fate of the UK steel industry. Those same experts called Tata Motors' acquisition of Jaguar Land Rover's assembly plants a "strange" decision that would burden the entire Tata group.

It's amazing how wrong analysts can be. Less than 10 years have passed, and the situation looks fundamentally opposite to their forecasts. Tata Steel UK is closing factories in the British Isles in the face of exorbitant costs and an influx of cheap imports, while Tata Motors is resting on its successful business laurels and expanding its capacity.

British steel production in September fell to 579 thousand tons, half of last year's level. Tata Steel UK is laying off 1,200 people, Caparo Industries will put 1,700 employees out of the gate, and SSI has left over 2,200 people to their fate. Thus, over the last month, at least 5,100 metallurgists in the UK were unemployed.

The British unions, guided by the erroneous conclusions of the same analysts, believe that China is to blame with its cheap steel, which is unknown how it gets to the British market at prices below cost. The hottest heads and conspiracy supporters believe that in this way China wants to destroy the metallurgical industry in Great Britain and enslave the country's industry.

In fact, things are much worse, both for Britain itself and for the global steel industry as a whole. There is too much excess capacity in the market. According to the World Steel Association, only 69.3 percent are currently involved. 30 percent stand in full readiness to flood the market with cheap metal, and as soon as there is at least some hint of an increase in demand in the world, it is immediately filled with the existing capacities. And not necessarily from China.

The recently reopened steel plant in the same UK with the sacred name Liberty Steel in Newport plans to roll steel billets from Russia and Brazil into sheet steel for the automotive sector. But he will not melt steel. It follows from this that it is profitable to produce metal products in Great Britain, but it is unprofitable to melt steel. And here we can draw a conclusion about the purposeful policy of cabi