Though Britain’s steel struggles are, rightly, taking up the lion’s share of column inches inside the UK, there can be no doubting that the over abundance of steel in the world market is doing immense damage to a number of nations. Now, in an effort to – hopefully – turn a corner on this crippling global issue, a crisis meeting has been called in Brussels today.
In that meeting, the UK’s Business Secretary Sajid Javid and politicians from 27 nations (including both China and India) will discuss “solutions to the overcapacity crisis” that has loomed over the last six months. The meeting comes after an announcement that part of Tata Steel’s UK operations would be purchased by Greybull Capital, and should give greater confidence to those calling on the UK government to bail out the struggling industry.
In a statement submitted to the House of Commons, Mr. Javid said: "We have secured assurances from Tata that they will be responsible sellers of their remaining UK steel operations and will allow reasonable time to find a buyer. My colleagues and I have already been in contact with potential buyers making it clear that the Government stands ready to help."
Perhaps of greatest importance is the fact that China have been convinced to come around the table to discuss steel overproduction. The country has been dealing with an economic downturn, and so their own demand for steel has fallen, thus leading to greater amounts of Chinese steel in the European marketplace. Tellingly, China has produced more steel in the last two years than Britain has since the year 1870. With China around the table, there’s hope that global steel production can be cut fairly and evenly to match a decreased global demand.
However, it should be noted that China are refusing to accept the blame for various steel foundry closures around the world, stating that blaming the country for the steel industry’s issues were a “lazy and lame excuse for protectionism”. In an English-language piece, the Chinese state run news agency said "Blaming other countries is always an easy, sure-fire way for politicians to whip up a storm over domestic economic woes, but finger-pointing and protectionism are counter-productive. The last thing the world needs is a trade war over this issue. Far more jobs will be lost than gained if protectionism prevails”
Nevertheless, the so-called ‘dumping’ of Chinese steel onto the market at cheaper than wholesale prices remains a huge bone of contention for the steel industry. Just last week, more than 40,000 German steel workers took to the streets to protest the issue.
Time will tell whether all the parties at the table will be able to find enough common ground to hash out a deal, but with so many vested interests (particularly those of China) it seems somewhat unlikely. Nevertheless, this is an issue which affects the world, so hope remains that something can be done.