30 Mar India’s Tata Steel plans to sell UK business
Tata Steel (LSE:TTST) announced yesterday that it plans to sell its entire UK steel plant due to the global oversupply of steel, high costs, currency volatility and European imports.
A union-guided commission to Mumbai proved unsuccessful in persuading the Indian holders to agree to a turnaround plan. The company’s decision has caused thousands of jobs to be at risk at the South Wales, Shotton, Corby, and Rotherdam sites.
The firm said conditions in Europe and the UK have quickly worsened and established it will now “explore all options for portfolio restructure.”
Colin Hamilton, commodities expert at Macquarie Group, said: “Steel demand is still falling. It peaked in 2013. It is very hard to see who would buy the ‘hot end’ of the business, the steel making end itself, although the rolling mills are more attractive, I think it is unlikely we will see a buyer for the business as a whole.”
Tata’s Port Talbot site is expected to be losing around £1 million a day.
In related news, Scottish Power Ltd (LSE:SPW) announced last week that it finished production at Scotland’s last coal-fired power station.
Longannet, Scotland’s largest 46-year old coal station which powered over two million homes every year was shut down last Thursday, ending coal-fired electricity production in the country.