Bad news for the UK's coating industry

Citation

(2000), "Bad news for the UK's coating industry", Anti-Corrosion Methods and Materials, Vol. 47 No. 4. https://doi.org/10.1108/acmm.2000.12847dab.001

Bad news for the UK's coating industry

Bad news for the UK's coating industry

Keywords Coatings, Steel, United Kingdom

While steel production has increased in Europe it has dropped in the UK. This is bad news for UK manufacturers of anticorrosive coatings. UK steel production fell 1 per cent in the first quarter this year compared with the same period in 1999, while the rest of the world recorded the largest monthly production increase for a decade in March. In the first three months, EU steel production rose 10 per cent year on year, with Euroland members Germany and Italy recording advances of 17 per cent and 12 per cent respectively. Steel production in non-Euroland member Sweden grew 10 per cent.

Commenting on the figures Peter Siddall, UK Steel Association president and chairman of the Iron and Steel Statistics Bureau said: "We all know that sterling's strength is playing havoc with exports. We now have comparative evidence of how this extends beyond the euro and what that may mean for the future. In the last 15 months, the Swedish kroner has fallen 8 per cent against the pound, making Sweden, traditionally perceived as an expensive source of manufactured goods, much more competitive."

Due to sterling's strength, the association's Steel Demand Forecasting Group anticipates a 2 per cent decline in exports for the year, despite the predicted rise in world economic activity and strong demand in Europe.

Peter Siddall: "According to our data, it is no longer valid to claim that the UK is ahead of the European economic cycle. As far as our manufacturing customers are concerned, the strength of the pound has simply decoupled them from European growth. The coming months will show whether steel producers are right to believe that their industry is an accurate trend indicator for UK manufacturing."

Is the problem the strength of the pound? Mike Legg, president of the Machine Tool Technologies Association (MTTA), at a recent seminar held at the Institute of Mechanical Engineers, suggested that the weakness of the euro was the problem. However, one thing is certain, less steel produced equals less coating materials required.