Continuing woes in the eurozone and economic uncertainty in the second half of 2011 has badly affected demand as customers ran down stocks, latest steel production figures out today show.
UK steel output in 2011 was just 0.8% higher than in 2010, but suffered a major drop in the last quarter of 2011 as the weakening demand took its toll, according to data from manufacturers organisation UK Steel.
According to its data total output per week in 2011 was 182,298 tonnes per week compared to 180,850 tonnes per week in 2010, a 0.8% increase. But in quarter four output fell to 168,192 tonnes per week, a drop of 7.7% from the previous quarter and lowest quarterly output since early 2009.
“After an improvement in the first half of last year, steel demand could not escape the nervousness in key customer sectors about the strength of both the UK and eurozone economies,” said UK Steel director Ian Rodgers. However, UK Steel is expecting growth in the first quarter of this year as firms re-stock supplies, and there is greater demand from the automotive market.
Further worries for steel market
Last week saw further bad news for UK’s steel industry with steel manufacturer Thamesteel being placed in administration.
The Sherness-based firm said it had run into “severe financial difficulties” due to the continuing problems in the market and global economy.
Over 400 full-time jobs are now at risk as the firm, with a turnover of £200M in 2010, seeks to find a buyer.
Steel giant Tata also announced it was shedding 110 jobs last week at its site in Corby in Northamptonshire. Tata said the move followed a “detailed review” of its European business.