This Monday SSI UK (Sahaviriya Steel Industries UK) impacted scrap prices, and every news headline, with the announcement of pausing production of steel on 18th September 2015, resulting in the loss of 1,700 jobs including entire families that were employed at the plant.
The Impact On Scrap Prices: Why Has This Happened?
These job cuts have come about after the price of steel has almost halved over the past year, make vehicle scrap prices reach an all time low. This is simply down to companies internationally producing more steel than meets the world’s demand.
Who owns the steel works?
The Redcar plant was founded by Dorman Long in 1917 in order to produce enough steel to build structures such as the Sydney Harbour, Tyne and Auckland Harbour Bridges. After the Second World War in 1967 the plant became nationalised and the new company was called British Steel. Margaret Thatcher privatised the steel works in 1988 and in 1999 it was merged with a Netherlands-based company called the Corus Group.
More recently in 2007, Corus was bought by Tata Steel, an Indian company who now own Jaguar, Land Rover and Daewoo amongst many other brands. After a large contract went bad in 2009, Tata ceased production lines and 1,700 jobs were lost. Luckily in 2011 Sahaviriya Steel Industries, a Thai company re-opened the plant after purchasing it for £291 million and securing 700 jobs. However today it seems we are having a Deja-vu from 2009 all over again.
What does this mean for the plant?
The steel plant is not being completely shut down as 400 to 450 employees will stay in work to deal with the storage of the iron and steel already produced while simultaneously keeping the ovens and power station in action so that the plant can start up again in the future if demand and supply become a more equal balance once again.
Won’t the Government help?
The steel workers have protested using the SOS slogan, “Save Our Steel” with unions saying that the Government should step in to help keep the plant going in attempt to save these jobs and the local area which will be affected shortly after. It is predicted that thousands more jobs will be in danger of being lost close to the site too.
Tories have responded by rejecting any plans to re-nationalise the plant with the answer being simply put that a company that has made losses over the past few years would only end up coming out from the tax payers budget. The tax payer should not be responsible for losses where the money could be spent on plans with a positive future.
Eugene Purvis is an SSI employee and union representative. At the age of 56 years old he blames the government as they are refusing to help.
“It’s the area of the highest unemployment in the country and you’ve got a government sat back prepared to let 1,600 people go on the dole.”
How does this affect the price of my scrap car?
Many vehicle scrap yards and breakers have also been stockpiling their incoming cars in an effort to ride out the recent slump in the prices of metal. They have been doing this in hope that the scrap metal value increases, however many scrap yards now cannot wait any longer and have had to reduce their prices to an all-time low. In some areas of the country this means that you may only get around a third of the price that you could have been offered for the same vehicle last year.
So when is the best time to scrap your vehicle?
Now is the best time as there are no predictions of an increase in the value of scrap metal and most authorised treatment facilities are expecting the price to go down even further. You can compare the prices of your local collectors on our form! www.scrapcarcomparison.co.uk