Monday, April 28, 2008

Steel on the net blog On Corus closure

The team at have for some time considered that - with no iron ore, a dependence on imported coal, high energy costs and expensive labour - there was little chance that UK iron and steelmaking would survive long-term. This view was reinforced by recent EU legislation concerning CO2 emissions, which can only result in further shifts of steelmaking from Western Europe to countries such as Brazil, Russia, India and China.
However, we always beleived that the future of UK steelmaking was in downstream steel products, where know-how, high value added, closeness to markets etc offset some of the economic disadvantages of making steel in the UK. The acquisition of Corus by Tata was, we also thought, a confirmation of our belief in the future of the UK steel sector downstream.
So this week's announcement about closure of downstream capacity at Corus comes as a bit of a surprise. With contraction of tinplate markets, and progressive relocation of automotive production and white goods manufacture to Central and Eastern Europe, it raises the question: what actually will Corus' new owners be left with in the UK, ten years down the line?

Steel on the net blog - steel industry weblog

One has to say that the guys over at Steelonthenet, have a good point here. I saw the acquisition of Corus by Tata, as a way for the Indian steelmaking group to get access to the markets within Europe. I assumed that the key to that was the downstream processing and distribution network. Maybe Tata don't see that market in the UK in the longer term.


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