Nowadays, the world industry is facing problems. Many of them concern Chinese cheap products. Steel industry is not an exception. In many countries this sphere has been impacted destructively. Such big and powerful countries as the USA, Canada, Great Britain and many other are suffering from cheap Chinese steel, imported in the countries at low prices. There have been a range of shutdowns and layoffs. Approximately 3,500 workers have lost their jobs in the USA; the same number is in Canada. Concerning the UK, this country has laid off about 4,000 employees according to October reports. People are arguing about governments not doing anything and talking about strikes and protests. Such situation is forcing the heads of states to meet and think about possible solutions for this problem. After reaching such low index in steel industry in the UK, European economy ministers seem to hold an urgent meeting with the aim to discuss the crisis and make right decisions concerning the improvement of the situation. The main demand of the industries is to block the dumping of cheap steel from China as it causes lowering of the world steel prices.
The representatives of the UK Steel claim that they can't waste time and must act immediately preparing a fast respond to the problem. The companies fear that in the near future imported Chinese steel may displace more than half of domestic products. Gareth Stace, director of industry lobby group UK Steel, said that the US and some other countries had taken necessary measures to prevent import of Chinese steel by distorting their markets. He claimed that the EU must do the same.
Recently Chinese president Xi Jinping has visited the UK, he has put Downing Street under further pressure to raise the matter with the Chinese and further blows to steel industry have coincided with it. The Chinese president is interested in selling Chinese steel as many of steel-making companies are owned by local governments that subsidize them appropriately. Knowing about the problem of oversupply, Chinese companies are not going to stop steel production.
The reason of this industrial crisis is not only cheap import but also high electricity prices, high business rates, cheap imports and the strength of the pound. Having considered this, Alex Eggert, director general of the European steel trade body Eurofur, says that it is not only necessary to forbid cheap imported steel, but to set fair trade rules and follow them. The UK authorities tried to simplify the crisis asking to rethink the issue of green taxes costs which have the impact on the steel industry as too high taxes force to buy cheaper steel. It has been also said that the countries suffering from such crisis should learn from other countries, such as Germany and Italy, how to cope with problems and to lead domestic industry, where the steel sector must hold the key place.
The UK local governments and other officials seemed unwilling to take measures in order to overcome the crisis. For example, business secretary Sajid Javid is accused of "using EU as a protection" while facing industry crisis. In the result of this people from the UK, Belgium and France can be seen protesting and demonstrating in Brussels where the leaders are going to hold the meeting. People hope to have their jobs returned and it is possible only by improving the level of domestic industry. Home-made steel should be cheaper in order to compete with imported Chinese steel.
Several mills have already been closed. For example, Redcar steel has recently announced the closure, there are many workers laid off in Scunthorpe, Lanarkshire and Lincolnshire, where there are plants of Indian firm Tata. The predictions of the World Steel Association are not encouraging. The Association anticipates that the demand will continue to drop. The steel-making countries such as China are subsidizing steel products and lowering their prices artificially. This is the reason of above-mentioned crisis.
Steel industry workers are arguing that EU considers the cases of dumping steel too slowly. The investigation of the case also lasts very long before taking the appropriate decision. People also want the UK government to do anything with high energy prices and business rates. They demand usage of home-made steel instead of imported. In the response of this Sajid Javid complained that it was the European Union that restrained him from taking necessary measures. Harish Patel, national officer at the Unite union, in his term, that it was not an excuse to hide behind the EU instead of resolving the question of thousands of people left without jobs.
