Britain on Saturday asked China to hurry up in tackling overcapacity in its steel industry, hoping to stem the flood of cheap imports into Europe which India’s Tata Steel Ltd has blamed for its decision to pull out of the UK, putting 15,000 jobs at risk.
Tata put its entire UK business up for sale last month, including its flagship production plant at Port Talbot in south Wales, saying it could no longer endure mounting losses caused by increased imports to Europe from countries such as China, high manufacturing costs and domestic market weakness.
“I urged China to accelerate its efforts to reduce levels of steel production,” British Foreign Secretary Philip Hammond said in a statement issued after he met with his Chinese counterpart, Wang Yi (王毅), in Beijing.
“The UK’s focus is on finding a long-term sustainable future for steelmaking at Port Talbot and across the UK and I welcomed the potential interest of Chinese companies in investment in UK steelmaking,” Hammond said.
The global steel industry is suffering from overcapacity as a slowdown in growth in the Chinese economy has reduced domestic demand.
China, which produces half of the world’s steel, as well as Russia have responded by diverting more of their output to markets like Europe, sending prices plummeting.
The EU opened three anti-dumping investigations into Chinese steel products in February and imposed new duties on imports after the European steel industry said thousands of jobs were at stake.
China said earlier on Saturday that plans to shut steel mills over the next five years would cut capacity to an estimated 1.13 billion tonnes by 2020, which is still far in excess of the country’s needs.
A statement released by Chinese Ministry of Foreign Affairs about Wang’s meeting with Hammond made no mention of the steel issue.
Separately, Tata Steel on Saturday said that Britain’s Serious Fraud Office (SFO) is investigating a lapse in procedures at its steel-making site in Yorkshire, as the group seeks to sell its UK operations.
In a filing to the Bombay Stock Exchange, Tata confirmed media reports of an SFO probe, saying it notified fraud investigators after discovering the problems last year.
“During an internal audit conducted by the company, certain inappropriate testing and certification procedures at the South Yorkshire-based Speciality Steels business were identified,” Tata said in the filing, signed by company secretary Parvatheesam Kanchinadham.
Tata did not specify the issues, but the UK’s Daily Telegraph said police were probing allegations staff may have falsified certificates detailing the composition of its steel before sale.
Tata said that after discovering the problems it immediately stopped the improper practices, alerted more than 600 direct and indirect customers and notified bodies including the SFO, which has opened a criminal investigation.
Additional reporting by AFP
RSS