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The rise and fall of British Steel industry
May 23,2016 09:57CST
industry news
For those of us who live partly in the past, the idea that the British steel industry should be under threat is both familiar and unimaginable.

UNITED KINGDOM May 22 2016 1:31 PM     

By Peter Day  
Global business correspondent
For those of us  who live partly in the past, the idea that the British steel industry should be  under threat is both familiar and unimaginable.

But now Tata Steel is negotiating to sell its huge works in Port Talbot and  other UK interests and the spotlight is on the apparent long decline of the  British steel industry, and how it happened.

For steel was once one of the pillars of British industry, one of the  "commanding heights of the economy" twice taken into state ownership (at least  in part) by Labour governments after World War Two, twice privatised by the  Conservatives.

Some 350,000 people were employed in the steel sector when it was  nationalised by Prime Minister Harold Wilson in 1967, compared with about 30,000  now.

Steel was at the heart of the new Europe in the post-war recovery:  the EU started life as the European Coal and Steel Community. Steel was vital to  build battleships and munitions, so it was a strategic industry. Steel was how a  country defined itself.

And that seems to explain the ferocious booms and  busts to which the industry has been prone for so long.

Huge  investments
It is natural for a country when it is developing to  invest in new steelworks as it tries to create its own industrial revolution  (think Japan, South Korea then China).

Railways, bridges and buildings all need steel, and lots of it.

But steel needs huge investments in blast furnaces and rolling mills to  create an industry, and once erected they churn out more mass-produced steel  than a developing country can cope with.

This tends to push down prices and impels new producers to find new markets  abroad for their steel. It's a global world.

A glut develops, prices plunge, giant steelworks rack up losses or at best  break even. A bust is born. It has happened regularly since 1945.

But the world has never seen anything like the Chinese industrial revolution  of the past 30 years, and one of the things that China invested in on its  green-field sites on the edge of cities was steel.

When China's economic development slows down as it has done in the past five  years, there's too much steel at home and producers cut prices to export the  stuff. This time the steel glut is a huge one.

That's one of the main reasons why the Port Talbot plant is now up for sale.  After Tata Steel bought it and three other former British Steel plants in 2007,  some £300m was invested in new equipment in South Wales.

Tata from India wanted to keep up with its international rivals; its takeover  of the Anglo-Dutch company, by then called Corus, was a £6.2bn bid to create the  fifth largest steel company in the world.

It happened just before the  financial crisis, just before the world economy slowed down even in the  developing world.

Boom and bust
The Tata sale of Port  Talbot - first headlined as a closure in March - has created huge uncertainty  for the 37,000 people of the Welsh town absolutely founded on iron and steel,  many of whom rely on the works for their living, directly or indirectly.

But steel has been here before. And the peaks and troughs of the production  cycle are a significant part of the story of how British industry evolved - and  perhaps the penalties you pay for being a pioneer.

Iron was at the heart of the industrial revolution, led by British expertise  at Coalbrookdale in Shropshire at the very end of the 17th Century.

Despite the world's first iron bridge across the Severn at Ironbridge (of  course), iron was mostly brittle and snapped under pressure.

Steel - strong and flexible - was made by small-scale workshop craftsmen  until Henry Bessemer brought his new invention, the converter, up from London to  Sheffield in the 1850s.

And Bessemer ushered in the mass production revolution which started the boom  and bust mentality of steel which persists to this day. Blast furnaces such as  Bessemer's created the city of Sheffield.

Science  park
The other day I was in the Don Valley that runs between  Rotherham and Sheffield just a few miles away. I was there to see the Magna  Science Adventure Centre, a heritage place created out of one of the old works  at Templeborough, run in its prime by the firm of Steel, Peech and Tozer and  known locally as Steelos.

It's far larger than a cathedral or an airship hangar, and once housed six  monstrous electric arc furnaces making steel from scrap. It was the biggest  concentration of them in the world.

The centrepiece of the vast space is a recreation of the steel production  process called the Big Melt. Every hour in front of parties of enthralled  schoolchildren, there's a show of simulated sound and gushes of fire from the  extraordinary electric arc process that turns scrap metal back into steel.

The show is awe-inspiring and so is the process.

Living  history
And so is the long tradition it commemorates: the 150,000  people who once worked in this valley in a succession of huge famous name  steelworks.

John Heaps showed me round; he worked for more than 40 years in several of  the works in and around Sheffield, and he has also studied the story of the  industry he was part of.

It's not just history when you listen to John Heaps; the vast enterprises  come alive.

Source:  BBC


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