The company, which will stop making steel plate at its Long Products Europe business, also blamed high power costs a strong pound for the proposed moves.

“As a result, Tata Steel has been forced to make changes to its Long Products Europe business. The proposed changes would lead to around 1,200 job losses — about 900 in Scunthorpe and 270 in Scotland as well as a small number at other Long Products Europe sites,” it said in a statement.

The business announced proposals to stop production of steel plate. This comes in response to a shift in market conditions caused by a flood of cheap imports, particularly from China, a strong pound and high electricity costs, it added.

Plate mills in Scunthorpe, Dalzell and Clydebridge would be mothballed, while one of the two coke ovens at Scunthorpe steelworks would be closed, Tata Steel said.

Tata Steel Europe Head Karl Koehler said: “I realise how distressing this news will be for all those affected. We have looked at all other options before proposing these changes. We will work closely with affected employees and their trade union representatives. We will look to redeploy employees, wherever possible, and minimise employee hardship.”

The UK steel industry is struggling for survival in the face of extremely challenging market conditions. The industry has a crucial role to play in rebalancing the UK economy, but it needs a fairer system to encourage growth, he added.

The European Commission needs to do much more to deal with unfairly traded imports – inaction threatens the future of the entire European steel industry, Koehler said.

In last two years, imports of steel plate into Europe have doubled and imports from China have quadrupled, causing steel prices to fall steeply. At the same time, a strong pound has undermined competitiveness of the business’s Europe-bound exports and encouraged more imports, Tata Steel said.

To counter the situation, the firm is concentrating on higher-value markets with a focus on developing stronger and lighter products for its customers.

Executive Chairman of the Long Products Europe business Bimlendra Jha said: “We are looking closely at the performance of all parts of Long Products Europe as part of a focus on returning to profitability.”

The consultation process with Tata Steel employees and their trade union representatives begins today. Its subsidiary UK Steel Enterprise will look at how it can provide more support to the local communities affected by the announcement and help stimulate new job creation in those areas.

-PTI, LONDON, October 20, 2015