On three occasions this month I have spent time in the BBC Radio 5 Live studios answering questions on the ailing British steel industry. My on-air ‘appearances’ were the result of SSI UK and Tata Steel closing plants and slashing jobs in Redcar and Scunthorpe in the United Kingdom – and it’s all China’s fault.
The Chinese economy is slowing but China is producing more steel than it needs. Result? It ‘dumps’ excess metal on foreign markets, the global steel price dips and steel producers struggle to survive. It’s happening all over the world, but unlike in North America – where anti-dumping and countervailing duties are imposed on ‘rogue nations’ like the Chinese – Europe’s lumbering bureaucratic machinery is slow, and some would say unwilling, to react.
Something must be done, but I doubt if David Cameron, the British Prime Minister, will jeopardise his rather dangerous nuclear power deal with the Chinese by berating Xi Jingping for dumping cheap steel on the UK market.
The Chinese problem is one that requires a multi-lateral approach. Xi Jingping needs to be told – in no uncertain terms – that China can’t expect to be granted ‘market economy status’ (which it craves) if it doesn’t behave like one. Make no mistake: Chinese steel producers, unlike those in the west, don’t have to generate a return on capital. We’re back to what western steel producers crave most: a level playing field. But will they ever get one and does anybody really care? Not the UK government, it seems.
The proverbial ‘man on the Clapham omnibus’ must be wondering whether the British Government is serious about the survival of its homegrown heavy industry and, indeed, the much talked about ‘northern powerhouse’ it promised to create if a high speed rail link is established between London and ‘the north’. It’s all beginning to sound like empty rhetoric.
How is it that we find ourselves in a position where, through countless European directives and punitive green taxes, we have regulated our foundation industries into virtual oblivion? Why have we given steel producers in other regions of the globe an unfair advantage when it comes to competing on the world stage?
Applauding ‘globalisation’ is fine, but why should western steel producers play with both hands tied behind their backs?
This issue of Steel Times International discusses many different subjects. On the technical front we have three interesting articles on ironmaking and then, in keeping with our aim to keep readers abreast of the latest steel industry conferences, a report from the editor of the magazine on the 49th World Steel Association Conference, which this year was held in the Windy City, Chicago, USA.
Myra Pinkham discusses the US Oil Country Tubular Goods market and, in Perspectives, we hear from Thermo Fisher Scientific's Kevin Quinn who argues that overcapacity creates opportunities.
Regular features, such as industry news, country updates and, of course, the History page make up this month's issue and we still have one more issue to go before the year-end.
Gareth Stace, the recently appointed director of UK Steel, is a keen cyclist and so am I, although my definition of ‘keen’ is two rides a week on a heavy mountain bike through the rural country lanes of Northern Kent. Gareth rides to work from the southern reaches of Surrey into Central London – roughly 25 miles each way and early enough to avoid dangerous encounters with crosstown traffic.
There’s nothing negative to say about cycling: it keeps you fit and I believe there’s a spiritual dimension too. When I’m on the saddle, out in the sticks with fields to the left and right of me and a clear road ahead, I find I have time to think about ‘stuff’. When my father died in 2011 I dealt with the grief alone, while riding the bike, allowing any tears to fall by the wayside and be absorbed by the tarmac.
Cycling into and out of London on an almost daily basis, Gareth has time to think – and let’s face it, as the new director of UK Steel he has plenty to think about, as I discovered when we met for an exclusive interview a few weeks ago.
Gareth arrived in the job at what he describes as a very challenging period for the steel industry in the UK, Europe and globally; and I find myself wondering whether, while riding into town or heading south on his homeward journey, Gareth is coming to terms with what he describes as ‘the perfect storm approaching’.
There is plenty to be concerned about: a significant increase in steel imports from China; business rates that are 10 times higher in the UK than in France or Germany; punishing environmental costs; a strong pound; a new Conservative government; and that elusive level playing field that doesn’t appear to be getting any closer, even if you’re riding a bicycle.
Gareth is fully prepared to meet head-on the challenges gathering like storm clouds overhead, but even the most effective waterproofs might struggle to keep him dry if, as predicted, they all hit the ground simultaneously.
There is a huge ‘but’ that should follow on from the headline of the Gareth Stace interview in this issue. “I’d like to be optimistic,” Gareth told me at the start of our interview, but he implied that it wouldn’t be an easy ride.
That said, most cyclists would agree that the best way to approach a steep hill is to select the right gear and keep pedalling – eventually you will reach the summit.
When it comes to optimism, Manik Mehta's report from the 30th Steel Success Strategies conference in New York talks about 'signs of optimism' in the US marketplace even if some of the big names – Lakshmi Mittal being one of them – not gracing the event with their presence. According to Manik, the conference provoked some interesting discussions on the big issues affecting the global industry.
We have three interesting features on rolling and some interesting articles on special and stainless steels, not forgetting our regular features.
I never thought I'd be charged with the task of writing two leader articles in one month – let alone two magazines! – but here I am, penning a few words to accompany this, our first ever digital edition of Steel Times International.
I must stress that the print edition of the magazine reigns supreme and always will, but we thought it mght be a good idea to introduce a new editorial dimension and offer readers some additional technical articles, all fresh off the press, on top of those published in the print edition earlier this month.
In this issue, you will find articles on rolling, testing and analysis, handling, and electric steelmaking, not forgetting special steels, de-sulphurisation and vacuum de-gassing. There is also a healthy new products section replacing the conventional steel industry news, and a thought-provoking interview with a leading European technology provider and two prominent and influential steel industry associations.
In short, there's plenty to say about steel processing technology and I felt it imperative that we produced a dedicated magazine that sets out to cover some of the bases. My plan is to revisit the digital format once or twice next year and the focus will always be biased towards steel production technology in keeping with the long-established remit of the Steel Times International brand.
Taking a closer look at some of the issues facing the steel industry in terms of production technology, EUROFER argues in this issue that the greatest test for the steel industry going forward is likely to be the need to secure continued and adequate financing for investment into the deployment of much-needed technologies for reducing CO2 emissions.
Alacero, the Latin American Steel Association, expects to see continued improvements and developments within the field of steel production technology, but argues that greater collaboration is needed between steelmakers and technology providers.
For technology providers, like Tenova, the real challenge is to cope with the lack of investment from the steel industry. As the company points out, "We are forced to provide the market with innovation and the highest technological standards, but the market is not willing, or able, to pay."