British Steel has been hit by further Brexit-related problems and is negotiating a further loan with the UK government to help it “… navigate” increasingly choppy waters.
This follows the £120 million ($155m) loan granted by the British government in April to help the steelmaker resolve an issue with the non-appearance of its expected carbon allowances from the EU for 2019. This happened because EU Emissions Trading Scheme free allowances were not issued to UK steelmakers by the EU because of Brexit uncertainty.
Reports by UK media on Tuesday first broke the news of the new request by British Steel for another government loan of “… up to £75m”. The firm has reportedly faced a slump in orders from European customers due to uncertainty over the Brexit process.
When asked for comment by Kallanish, a British Steel spokesperson said: “As we have previously commented, the uncertainties around Brexit are posing challenges for all businesses including British Steel, and we are holding constructive discussions with our stakeholders on how to navigate them.”
The long products specialist made a loss of £19m in its last reported financial year ending 31 March 2018 after having made a healthy profit in its first year of operation of over £92m. As well as Brexit-related waves, the integrated producer has also faced climbing iron ore costs over its nearly 3-year existence. At the beginning of June 2016, the Kallanish KORE 62% Fe index was at $49.06/tonne. On 14 May 2019 it was above $94/t, and has been in the $60-90/t range for much of the time in between.
