Troubled UK long steel producer British Steel entered compulsory liquidation on May 22. Fastmarkets examines the reasons behind the company's recent struggles, from uncertainty about Brexit and a slump in orders, to rising costs for raw materials.
Brexit uncertaintyThe future of British Steel remains uncertain, with the UK's Insolvency Service approaching "more than 80 potential trade purchasers" to bid for the business.The company, which produces around 2.8 million tonnes per year of long steel, including sections, wire rod and rail, exports the majority of its production, with the European mainland a strong target market.Interested parties will still be concerned about the lack of certainty surrounding the UK's future trading relationship with the European Union (EU), after the UK was granted a six-month extension to delay its departure from the EU ('Brexit') until October 31, 2019.UK and European steel market participants have repeatedly called for the EU and UK to reach a Brexit agreement to avoid extending the uncertainty."The growing uncertainty around Brexit is a major contributory factor in the compulsory liquidation of British Steel, which saw a slump in orders from EU customers," Vassilis Akritidis, partner at...