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UK steel sector crippled by power costs as Brexit looms

Reuters  |  LONDON 

By Maytaal Angel

LONDON (Reuters) - British steelmakers pay twice as much for as their French competitors and 50 percent more than their German rivals, an report showed on Wednesday, piling pressure on the sector as Britain prepares to leave the

The report, commissioned by group UK Steel, shows the disparity between UK prices and those in EU countries has increased for a third consecutive year, crippling such as

It comes ahead of Britain's looming EU exit on March 29, which could hit UK manufacturing hard if it results in widespread customs delays, new tariffs and other trade barriers with Britain's largest trading partner.

"The price disparity continues to erode the industry's ability to attract international investment - investments will instead be made in markets with more favourable conditions," said Gareth Stace, UK Steel's

"It is high time the government ensured the future viability of the UK sector."

The report shows the government's review on industrial strategy and energy costs, launched a year ago, has yet to protect vulnerable industries from the effects of Britain's looming EU exit.

Steel, the second most used material in the world behind cement, often makes its way up Britain's political agenda because it is seen as a strategic industry critical for growth. The is also used to make military weapons.

The UK industry is slowly emerging from a crisis that resulted in the loss of 7,000 steel jobs, about a quarter of the workforce, between September 2015 and March 2017. It is estimated that for every axed, four jobs are lost in related sectors.

Tata Steel UK, Britain's largest steelmaker, is still seen by some analysts as vulnerable to cutbacks because of poor earnings as its Indian parent prepares to finalise its merger with German steelmaker next year.

(Reporting by Maytaal Angel; Editing by David Goodman)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, December 05 2018. 06:45 IST