Industry body UK Steel says firms face a perfect storm of problems - crippling electricity prices, cheap Chinese imports and a strong pound hitting exports - and little help from a slow moving government.
Gareth Stace, director of UK Steel spoke out ahead of a steel crisis summit called by government, on October 8.
He said: “Is the government really bothered whether we have a foundation sector in the UK or not? It feeds into supply chains in important sectors such as automotive and new nuclear.
“To overlook them is very short sighted and could damage the national economy. We’re saying, ‘give us a half a chance to compete’.”
In July, Tata Steel announced 550 South Yorkshire jobs were at risk, some 485 on the Thrybergh site in Rotherham. The company says it is still consulting on redundancies stemming from the planned closure of its black bar business.
On Teesside, some 2,000 workers and 1,000 contractors at the SSI plant face a bleak future after its Thai owners announced the Redcar base would be mothballed.
Mr Stace said cut-price Chinese steel was being ‘dumped’ in the UK due to over production there. Anecdotally, it was selling for £60-a-tonne less than its UK equivalent.
“But steel companies tell me they win or lose a contract on a £5-a-tonne price difference.
“Around the world governments are looking at the Chinese situation. The US authorities investigate and act within weeks. But in Europe we are talking about a year. Then we’re faced with a double whammy in that the steel barred from the US comes here.”
Steel firms were also battling crippling electricity prices, a stalled compensation scheme for high energy users, high business rates and a strong pound, he added.
“The Energy Intensive Industries Compensation Package could level the playing field with France and Germany, but firms are still paying 70 per cent of the planned reduction.
“The government says, ‘we can’t give you the full package because of state aid rules’. But it’s a simple application form sat on a desk in Brussels. If the PM were to go over and say, ‘stamp that application’, it would happen. The government shouldn’t hide behind red tape.
“There’s some fantastic innovation in the steel sector in the UK, the sector as a whole is never standing still. But it’s a very difficult time, the government is talking about the ‘march of the makers’ and the Northern Powerhouse project. But if the government doesn’t help us it could be a flop.”
A Tata Steel spokesman said: “As the current situation affects all of our UK operations we would expect Tata Steel Europe CEO, Dr Karl Köhler, to attend the summit event.”