Interview: MEPS insight into Tata’s Port Talbot plan
MEPS International steel market analyst Jonathon Carruthers-Green has shared insight into Tata Steel’s decision to close its Port Talbot blast furnaces on LBC News radio.
Carruthers-Green appeared on the London-based radio station, which has a weekly audience of 2.6 million listeners, following the Indian-owned steelmaker's announcement that it would close its two blast furnaces at the South Wales site later this year.
Around 2,800 jobs could be lost at the Port Talbot operation as Tata pursues a £1.7 billion plan to replace its current UK production with an electric arc furnace (EAF) by 2027.
Speaking to LBC News presenter David Domb, on Friday (January 19) evening, Carruthers-Green said that the UK steel industry would be “reeling” from the news but suggested that the decision was not wholly unexpected.
He said: “I think the main challenge that the UK has had, certainly with the blast furnaces, is to modify the production, decarbonise the production, and if we’re to face up to those challenges those blast furnaces would have eventually come offline. We were looking at when, not if.”
'Increased reliance on imports'
Asked about the repercussions of Tata Steel’s decision, on the UK steel industry, Carruthers-Green added: “What this will really mean, in the short term, is an increased reliance on imports. We’re going to see traders looking to purchase steel from places like India and China which won’t have quite as stringent emissions regulations as we do here in the UK.”
Tata Steel revealed, in a statement issued on Friday, that its hot rolling mill would continue to operate at Port Talbot. This will be supplied by imported semi-finished steel from the company’s plants in the Netherlands and India as well as “other select strategic suppliers”.
This is likely to have implications for the UK steel import safeguard quotas and, potentially, the UK Carbon Border Adjustment Mechanism (CBAM). The UK government announced in December that its CBAM regulations would be introduced by 2027.
To read more about Tata Steel’s plan for Port Talbot, read MEPS’s earlier article on the development.