Indian steelmaking giant Tata Steel is planning to slash 1,000 jobs at its facilities in the U.K. The job cuts arrive as fierce competition from Chinese imports is driving down steel prices and forcing British operators to shutter facilities.
Around 750 of Tata Steel's latest job losses are expected in Port Talbot, an industrial town in Wales, with other layoffs spread across its British plants, BBC first reported Sunday. A Tata Steel representative declined to comment on the plans, the news network said.
The cuts raise concerns over the company's commitment to the U.K., the Financial Times noted. Tata Steel already announced nearly 1,200 job cuts in the north of England and Scotland last year, citing plunging steel prices. The Indian group became Europe's second-largest steel producer after it acquired the conglomerate Corus Group PLC for $7.6 billion in 2006.
“These reports are concerning and we are monitoring the situation closely,” a representative for the U.K. Department of Business, Innovation and Skills told the Financial Times. “The government continues to engage closely with Tata on how we can help during this difficult period for the sector.”
U.K. imports of Chinese steel are rising as China seeks to off-load excess capacity. The country's slowdown in economic growth has left it with an abundance of the construction material.
Since its peak in 2013, China's demand for steel has dropped 8 percent in the last two years while domestic production has slowed only 4 percent, Jefferies, a global investment firm, said in a Jan. 13 client note. Chinese steel exports, meanwhile, surged nearly 80 percent in the same period.
As a result, the price of hot-rolled coil has dropped from 340 euros ($372) per metric ton to 320 euros ($350) per ton in the last three months, Gareth Stace, who directs the U.K. Steel industry lobbying group, told the Financial Times. “Market conditions are worsening by the day," he said.
Tata Steel could confirm the latest round of job cuts as soon as Monday morning, the BBC reported.