The Mudcat Café TM
Thread #165570 Message #3993347
Posted By: DMcG
22-May-19 - 03:29 AM
Thread Name: BS: Brexit #3: A futile gesture?
Subject: RE: BS: Brexit #3: A futile gesture?
That is one view of the reasons for British Steel's problems. Here is another lifted from the Guardian:
How much is Brexit to blame?
It is not the only factor in the crisis but it is very important. Steel contracts are typically agreed well in advance of the product being delivered. As things stand, the UK is due to leave the EU on 31 October and the terms of that separation are yet to be agreed, meaning British Steel's overseas customers don't know what tariffs will apply to steel they buy from the company. Sources close to the company say orders from customers in the EU and further afield have dried up as a result.
That is why the company needs an urgent cash injection, to replace the drop in sales in the hope that a favourable Brexit deal can be signed in the meantime. Another factor is the weakness of sterling since the referendum result, which makes the cost of imported raw material used in making steel higher. Greybull bought British Steel after the referendum but it did not expect Brexit uncertainty to last this long.
So which seems the bigger issue to me, tariffs and sales or carbon trading issues? I think you can guess.