British Steel to halt production at Skinningrove on low demand

British steel said June 3 it will halt production at its Skinningrove rolling mill on June 13 for three weeks and furlough around 300 staff, in what will be the second closure in three months due to low demand as a result of COVID-19.

Skinningrove was halted at the beginning of April for three weeks.

“Trading conditions in our markets remain challenging, including for products manufactured by our Special Profiles business in Skinningrove,” a spokesman said.

“While a small number of employees will remain on site, around 300 of our people will be furloughed…This is a temporary measure and, like last time, we will look to resume production at the earliest opportunity.”

Skinningrove produces steel products for industries such as yellow goods, rail and construction that has been hard hit as orders dried up. A spokesperson from British Steel was unable to provide figures on the amount of production capacity will be lost.

British Steel’s operation at Lackenby – Teesside Beam Mill – as well as the two blast furnaces in Scunthorpe will continue working, the spokesman said.

Last month, British Steel was purchased by Jingye Group. The Chinese company pledged to invest GBP1.2 billion ($1.5 billion) into British Steel, including improvements to production infrastructure, with the construction of an electric arc furnace in Teesside, opening 800 jobs in the area.

British Steel is the UK’s second-largest steelmaker behind Tata Steel, with 3 million mt/year of installed products capacity. The company has primary blast furnace production at Scunthorpe Steelworks and rolling facilities at Skinningrove and Teesside in the UK.

According to market sources, last year British Steel produced around 2.5 million mt of liquid steel.

According to S&P Global Platts data, the company produces 96% of the UK rail network’s steel rail, with Network Rail alone taking 100,000 mt/year. Other major customers are JCB, Caterpillar and South Africa’s Robor.

— Annalisa Villa