Klesch Group Ends Acquisition Talks For Tata Steel Long Products Business
08/04/2015 - A metals, chemical and oil company has withdrawn from discussions on buying Tata Steel's European long products business, according to a report in The Financial Times.
Klesch Group chairman Gary Klesch had been in talks with Tata Steel for more than a year, but has walked away from the table in frustration over what he said is the U.K.'s lack of action on energy costs and Chinese steel imports, the newspaper reported.
“What is the industrial policy when it comes to energy or when it comes to the massive dumping of cheap Chinese steel?” Klesch asked. “No one seems to care ... The industrial side is hurting. If it was important to them to ensure those jobs were saved they would figure it out.”
According to the Financial Times, the U.K.'s steel industry is struggling to compete on high energy costs, coupled with a strong pound. The situation, it said, is aggravated by cheaper Chinese imports.
The newspaper said that in the first five months of 2015, Chinese steel exports to the U.K. increased 22 percent, leading to lower prices. For instance, it said, the price of hot rolled coils in northern Europe has decreased by more than 20 percent since 2013.
Klesch told the newspaper that the government needs to address imports and energy costs, in tandem with other European countries, if it wants to keep the country's steel industry.
“Whoever gets the cheapest input costs wins the roses.” he said to the newspaper. “You have Middle Eastern countries giving free gas to aluminum smelters and the Chinese government supporting their steel industry. We don’t have a level playing field.”
“What is the industrial policy when it comes to energy or when it comes to the massive dumping of cheap Chinese steel?” Klesch asked. “No one seems to care ... The industrial side is hurting. If it was important to them to ensure those jobs were saved they would figure it out.”
According to the Financial Times, the U.K.'s steel industry is struggling to compete on high energy costs, coupled with a strong pound. The situation, it said, is aggravated by cheaper Chinese imports.
The newspaper said that in the first five months of 2015, Chinese steel exports to the U.K. increased 22 percent, leading to lower prices. For instance, it said, the price of hot rolled coils in northern Europe has decreased by more than 20 percent since 2013.
Klesch told the newspaper that the government needs to address imports and energy costs, in tandem with other European countries, if it wants to keep the country's steel industry.
“Whoever gets the cheapest input costs wins the roses.” he said to the newspaper. “You have Middle Eastern countries giving free gas to aluminum smelters and the Chinese government supporting their steel industry. We don’t have a level playing field.”
