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News Energy policy and steel jobs

  1. Nov 23, 2012 #1
    Tata Steel sheds 580 jobs in Wales, with several sites to close..

    This doesn't sound too well:

    Is this the tip of the iceberg?
     
    Last edited: Nov 23, 2012
  2. jcsd
  3. Nov 23, 2012 #2
    I can't speak for the UK, but the Sparrows Point steel mill in my hometown (just outside of Baltimore, MD, USA) just shut down, and there are no buyers. The current owner is RG Steel, who is going through bankruptcy. My tenant lost her job there and is struggling to pay her rent. When she was laid off, she was hopeful that there would be a buyer waiting in the wings like there had been in the past, but no such luck.

    I guess the thing that confuses me is that with the developing nations consuming so much steel, shouldn't demand for exports be up? Or are India and China just producing all of their steel domestically?
     
  4. Nov 23, 2012 #3

    Astronuc

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    http://ec.europa.eu/trade/creating-opportunities/economic-sectors/industrial-goods/steel/

    China produced 45% of steel in 2010. The EU was second.

    It's perhaps complicated with multi-national companies buying up companies in nations other than the one of origin.

    Energy and labor costs are certainly factors in the economics of the industry.

    It is possible that companies with low energy (possibly subsidized) and low labor costs (China and India) enjoy greater profits, which could allow them to buy up competition and eliminate it.
     
  5. Nov 23, 2012 #4
  6. Nov 23, 2012 #5

    AlephZero

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    This is a typical "no sense of proportion" news story IMO. Tata employs 50,000 people at 40 or 50 locations in the UK, and there are not the whole of the UK steel industry. http://uk.tata.com/tatauk/inside.aspx?sectid=5yDOtKBoe90=.

    Given the current world overcapacity in the steel industry, a 2% reduction in their workforce is hardly the end of economic life as we know it.

    There's also some "local" UK politics involved here. A steel plant at Redcar in the NE of England was closed in 2010, as a result of overcapacity in the industry. After a lot of political pressure it was reopened about 6 months ago. Tata didn't own it either before or after the shutdown, but if you insist on adding more capacity to an over-supplied industry for polotical reasons, why is it surprising that the other players respond?

    If the highest world demand for steel is in China, it makes more sense to manufacture it there than ship the raw materials and finished product half way round the world just to keep a few hundred Welsh workers employed IMO.
     
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