Liberty Steel to cut jobs in UK, but no production reduction for now

London — Liberty Steel plans to cut its workforce in the UK by 355 jobs in response to "challenging market conditions", the company said in a statement, but confirmed to Platts that for the time being this will be not reflected in a production cut.

"Liberty has taken enormous strides in improving the performance of the steel mills it has acquired over the last six years. We've restarted mothballed plants and demonstrated a commitment to invest in the UK," Liberty Steel UK CEO Cornelius Louwrens said. "Unfortunately, the steel industry in the UK is facing challenging conditions and we have made the difficult decision that there is a need to reduce the workforce at a handful of locations, in order to make them sustainable for the long term."

The company said the bulk of the layoffs -- some 250 jobs -- will be at its Stocksbridge site, in South Yorkshire. Rotherham and Brinsworth, the company's other two South Yorkshire sites, will only a headcount reduction of around 15 each, with the rest of the cuts -- 70 positions -- in Newport, Wales.

Liberty acquired its South Yorkshire plants as part of a GBP100 million ($131 million) deal with Tata Steel in 2017. The sites roll speciality steel products used in the manufacture of vehicles, aircraft, industrial machinery and equipment for the oil and gas industry.

In Rotherham, the company has two electric arc furnaces with a combined 1.2 million mt/year crude steel design capacity. The company is producing at the moment, but did not specify to Platts the capacity at which it is running its furnaces.

The company has two rolling lines for the production of flat special steel at Brinsworth and Stockbridge.

The Newport plant was previously a mothballed site bought by Liberty in 2013, which it returnedto production in 2015.

Last year, the company pledged to invest GBP15 million to upgrade its Newport rolling mill and it said it will also install an electric arc furnace to roll materials produced onsite. The company produced around 300,000 mt at Newport last year, out of the facility's 1 million mt/year installed capacity, working slabs produced in its mill in Australia, according to market sources.

The falling price of hot-rolled coil in the UK has pressured steel producers, a situation further complicated by Brexit uncertainty.

The Platts UK hot-rolled coil index basis DDP West Midlands declined in 2019 from GBP495/mt in January to a low of GBP381.25/mt in November before recovering to end 2019 at GBP427.50/mt.

-- Annalisa Villa, annalisa.villa@spglobal.com

-- Len Griffin, len.griffin@spglobal.com

-- Edited by James Leech, james.leech@spglobal.com