UK Steel Crisis

[DarloRich]

Out of curiosity, what are the local MPs saying about this, surely there must be a question or two in PMQ's about the upcoming unemployment in Teesside and what the Government are going to do about it. If not, why not??,

There are 3 Labour Mp's and one Conservative in the local area:

MP for Redcar: Anna Turley
Mp for Middlesbrough: Andy McDonald
MP for Middlesbrough South and East Cleveland: Tom Blenkinsop


MP for Stockton South: James Wharton

The MP for Stockton South is minister for the Northern Powerhouse. He seems happy to turn areas close to his constituency into the Northern Poorhouse.

 

[mbonwick]

Perhaps we need to ask why our electricity is so much higher, maybe its because instead of producing our own we buy a lot of it from France who can basically name their price?

Very little labour is required to make a tonne of steel. About 0.03 man-hours. Energy costs are a far bigger factor.

Absolutely spot on. I find it very disturbing that we've lost so much generating capacity without replacement. I don't think people realise just how close we are to having blackouts due to a lack of capacity...

The country badly needs investment in its electricity generating capability - and while I'm massively in favour of the new round of nuclear stations, they will come online too late to prevent a shortfall in supply unless something else is done.

Yet energy costs are the lowest they've been for years. Crude oil- which influences the cost of other fuels such as gas and coal- is at $48 a barrel, roughly half what it was a year ago.

That may be the case, but the price of crude is only loosely linked to that of gas and coal (which are more closely linked). While the price of coal is low due to the shale gas revolution, we don't have may coal-fired powerstations left in this country.
Gas prices have actually been pretty stable throughout this year, but are still a fair chunk above the low of summer 2014. As demand rises into winter, so will the price.

Add to that that the cost of electricity via the interconnectors to Europe is not set by production cost, but by the supplier who can "name their price" to an extent

 

[AM9]

Absolutely spot on. I find it very disturbing that we've lost so much generating capacity without replacement. I don't think people realise just how close we are to having blackouts due to a lack of capacity...

The country badly needs investment in its electricity generating capability - and while I'm massively in favour of the new round of nuclear stations, they will come online too late to prevent a shortfall in supply unless something else is done.




That may be the case, but the price of crude is only loosely linked to that of gas and coal (which are more closely linked). While the price of coal is low due to the shale gas revolution, we don't have may coal-fired powerstations left in this country.
Gas prices have actually been pretty stable throughout this year, but are still a fair chunk above the low of summer 2014. As demand rises into winter, so will the price.

Add to that that the cost of electricity via the interconnectors to Europe is not set by production cost, but by the supplier who can "name their price" to an extent

Maybe that is this government's (twisted) solution to the shortfall in generating capacity, - kill the energy intensive industries, with the bonus of fragmenting the unions influence. When many of those unfortunates who have just lost their livelihood become self-employed entrepreneurs selling imported trivia from Chinese factories on e-bay, organised union representation will be no use to them even if it existed.

 

[Xenophon PCDGS]

Will the money promised by the Government for the aftermath of this very sad affair have any real impact on encouraging existing local businesses to expand in that region?

 

[mbonwick]

Maybe that is this government's (twisted) solution to the shortfall in generating capacity, - kill the energy intensive industries, with the bonus of fragmenting the unions influence.

How is the closure of SSI Redcar the governments fault? It's not as though we have any particular policies that make steelmaking less viable here than in Europe - it is simply market forces.
We can argue 'till the cows come home as to whether the site should have been bailed out by the government, but ultimately it wasn't them who made the site unviable.

 

[Tetchytyke]

How is the closure of SSI Redcar the governments fault?

Look at the history of British Steel and Corus...

Perhaps it would appear they "Tory shire councils" are less affected because they know what they are doing and have plans in place for most eventualities.

Or it might be because whilst central Government funding has gone down for northern urban councils (which are predominantly Labour), funding has gone up for the Home Counties shire councils (which are predominantly Conservative).

I'm sure it's just a coincidence.

Why not? After all that is what Leeds did in the 90s when it was dying on its feet - fought for firms to move there, promising financial breaks, available workforce, cheap premises and improved standard of living. That approach is open to S. Yorkshire authorities, but they don't seem to have tried very hard.

Leeds was never struggling, at least not anywhere near the extent of the towns and cities reliant on coal and heavy industry. And I should know- I grew up in Bradford.

Manchester wasn't struggling either, no matter how much they like to pretend they were. The 1996 IRA bomb, from which the insurance money was the catalyst for development, did £1bn damage at today's prices; that level of damage doesn't get inflicted on Skid Row.

Leeds, Manchester, Sheffield, Newcastle and Liverpool have always been important and influential commercial cities, and regeneration was building from a strong base. Rotherham, Doncaster and Sunderland, er, haven't.

The word "menial" does betray a certain approach. Call centres not good enough?

They're not stable employment opportunities, as we've seen by the fact the jobs have all been moved to India the second the bribes were stopped
the investment came to an end.

 

[Jonny]

The reason that I fear many of the workers will struggle to cope is that they have defined themselves by what they do (most likely subconsciously TBF). Coming from that part of the world, it is a hard mentality to break and one that I have struggled to break myself. Sadly that is the reality that the 1700 will have to come to terms with.

Sadly, the value addition in steel lies not in the steelmaking but in the downstream processing. From a net import point of view, it would be better to import slab steel (the kind that the Redcar plant made) and export value-added products made with that steel. If the Redcar site is to have a future in steel products, that is what it will be.

 

[Marton]

i don't have the money to own shares in anything and neither do most people i know!

But you probably have a pension. If you don't you almost certainly will after the full introduction of workplace pensions.

Pension funds are huge investors in the UK share market and therefore all but the "virtual fund" public pension pension schemes (NHS, teachers, services, and civil service, but not local authority) have an interest in anticompetitive funding.
--- old post above --- --- new post below ---
The presence of four local authorities which are often seen to be resistant to joint working, and political infighting in the dominant party doesn't help. The boundaries are also very artificial between Middlesbrough and Redcar & Cleveland.

The area lost out when Teesside was broken up. Unitary authorities of 140,000 are just not big enough.

 

[ainsworth74]

If this is the end of steel making on Teesside at least it leaves one hell of a legacy behind it.

Dorman Long: The Teesside firm that bridged the world

Steel production on Teesside has ceased after SSI mothballed the Redcar works following a global downturn in the price of steel and later announced its UK arm had gone into liquidation. But what became of the company that founded the plant almost 100 years ago?

Monty Python's Michael Palin has been from pole to pole, circumnavigated the world in 80 days and traversed the entire Pacific Rim but - until last week - he had never been to Middlesbrough.

So how, when he did eventually make it to Teesside as part of his Thirty Years Tour, did he introduce himself to the men and women of Middlesbrough?

By expressing his admiration for engineering firm Dorman Long - gone from Teesside but not forgotten.

From a small railway station in Brazil to one of the icons of Australia, the writer and actor has discovered the company's name around the world, he told the audience.

The company was responsible for the harbour bridges in Sydney and Auckland, river crossings across Africa as well projects closer to home such as London's Lambeth Bridge, Newcastle's Tyne Bridge and Middlesbrough's Newport Bridge.

BBC News

A minor nitpick however is that the plant that is currently mothballed opened in the 1970s on a slightly different location to where the previous blast furnaces on Teesside had been located (hence why the railway had to be moved from it's old alignment through Warrenby).

But still quite a legacy to leave the world.

 

[DarloRich]

Dorman Long & the Cleveland Bridge and Engineering Company did alright!

 

[Xenophon PCDGS]

Have the liquidators made any statement with regard to site matters?

 

[jimm]

Have the liquidators made any statement with regard to site matters?

Give them a chance. They were only called in on Friday and have probably got other things on their minds than this.

 

[ainsworth74]

Give them a chance. They were only called in on Friday and have probably got other things on their minds than this.

Indeed, such as keeping Redcar coke ovens burning.

 

[Xenophon PCDGS]

Give them a chance. They were only called in on Friday and have probably got other things on their minds than this.

I was thinking in terms of the coke ovens situation, as that is an immediate matter to resolve.

 

[ainsworth74]

I was thinking in terms of the coke ovens situation, as that is an immediate matter to resolve.

It remains tenuous. Latest reports that I've seen suggest that the ovens will run out of coal on Monday and at that point will have to shut down unless additional raw materials are found and bought.

It seems that there is a company in Durham that are considering buying the site (including the blast furnace, ovens and mill) with a view to re-opening when the price of steel improves. But now that the site is in liquidation rather than administration it's unclear whether this is still viable even if they do want to go ahead.

Also I've been hearing that SSI were not paying pension contributions as they were supposed to including failing to pay the employee's contribution so watch this space in terms of what's going to happen to pensions.

 

[fowler9]

Am I correct in thinking that once a blast furnace is shut down it is b*ggered? As in it needs to be dismantled and a new one built?

 

[Haydn1971]

Putting the 1700 job losses into perspective - 550,000 local government jobs have been lost between the Spring of 2010 to late 2014 - that's 2300 per week ! Does anyone really think that the current government will give a flying hoot after taking apart the local government organisations by such a degree.

/political rant over

 

[ainsworth74]

Am I correct in thinking that once a blast furnace is shut down it is b*ggered? As in it needs to be dismantled and a new one built?

Depends on how you shut it down. If you literally just turn it off then that's pretty much it and it's game over you'd need to rebuild. If you mothball it properly (like last time) then it is possible to restart the furnace but even then it still takes quite a while and the costs are not inconsiderable.

 

[fowler9]

Depends on how you shut it down. If you literally just turn it off then that's pretty much it and it's game over you'd need to rebuild. If you mothball it properly (like last time) then it is possible to restart the furnace but even then it still takes quite a while and the costs are not inconsiderable.

Cheers for the info chief.

 

[HMS Ark Royal]

I believe they drain what they can out, then drill into the bottom to "tap the salamander" as its called

 

[fowler9]

I believe they drain what they can out, then drill into the bottom to "tap the salamander" as its called

And again thanks for the info. A tragic state of affairs. I remember a school railway society trip to Thornaby back in the day. We also got the train right the way down past the steelworks. A truly impressive sight.

 

[DarloRich]

sigh:

The coke ovens and blast furnace at the Redcar steelworks will close after no viable offers to buy them were received, the Insolvency Service has confirmed.

http://www.bbc.co.uk/news/uk-england-34509329

 

[HMS Ark Royal]

I can not help but wonder what is going to happen to the ship full of coal thats anchored off the coast!

Niggly point - SSI have not gone into liquidation - merely there UK branch.

 

[DarloRich]

I can not help but wonder what is going to happen to the ship full of coal thats anchored off the coast!

it will get sold to someone else

 

[eastdyke]

~
The news today is very very sad.

Are we really really sure that this is the end or are the liquidators into a last ditch effort at a sale?

Hoping .....

 

[ainsworth74]

Are we really really sure that this is the end or are the liquidators into a last ditch effort at a sale?

Pretty sure. This announcement was made because the liquidators couldn't find a buyer.

It's being mothballed like it was last time so there is a chance that it could come back but I doubt it. To restart again would require months and millions of pounds. SSI did that and this is how it ended. I can't see anyone else taking the same risk again.

 

[HMS Ark Royal]

~
The news today is very very sad.

Are we really really sure that this is the end or are the liquidators into a last ditch effort at a sale?

Hoping .....

As far as I know, its mothballing after a safe close down of the melting pots - assets assessed with a view to selling off. The works at Scunthorpe might take some of the equipment on for use as spares for their own plant machinery, but I see this as the end for RBS to be honest

 

[cactustwirly]

I thought I would post here instead of creating a new thread...

TATA steel have just annouced they intend to cut jobs a their Scunthorpe plant.

Tata Steel is to announce 1,200 UK job cuts next week.
The firm is expected to significantly reduce the workforce at its Scunthorpe steel plant, which employs 3,000 people and is one of the UK's biggest.
Tata may also cut jobs in Scotland, at Clydebridge in Cambuslang and Dalzell in Motherwell.
The company declined to confirm the job cuts, but said it had been facing challenges in the UK such as a surge in steel imports, and the strong pound.
A spokesman said: "We've made a number of structural changes to our UK business over the last months and years to make us more competitive. Like all companies we continue to review the performance of our business."
Roy Rickhuss, general secretary of the Community union, said it would seek talks with Tata Steel to discuss ways that jobs could be saved.
"This is yet another blow to our steel communities and demonstrates the precarious state of the UK steel industry and emphasises the need for government action," he said.
The potential job losses come as unions called on ministers to take "concrete and positive" action to save the UK steel industry.
The steel sector has been hit by SSI's decision to close its blast furnace and coke ovens in Redcar.
Business Secretary Sajid Javid chaired a steel summit involving unions, business leaders and ministers in Rotherham on Friday that was organised following the SSI closure.
'Crisis point'
Unions want the government to take "urgent short-term action" to support the industry.
Unite assistant general secretary Tony Burke said the steel industry was at crisis point.
"Ministers need to start by keeping the coke ovens at Redcar burning and supporting the wider steel industry through these turbulent times, so that British industry can benefit from major infrastructure projects, such as HS2," he said.

http://www.bbc.co.uk/news/business-34552523

 

[HMS Ark Royal]

*shakes head*

Weak pound: Unions blame the government for job losses

Strong pound:Unions blame the government for job losses

It is all very well asking the government to take over the steel plants, but that will not help the people already out of work

 

[RochdalePioneers]

It's neither a weak pound nor a strong pound. The Chinese are dumping cheap steel at a cheap price trying to force competition put of business. Elsewhere in Europe governments say hang competition law and do something. Here we describe the closure of one Steelworks and the threat against the rest as a "distraction".