India's Tata Steel is expected to shed around 1,200 jobs in the UK, worsening the crisis in the steel industry in the country, due to rising production costs and cheap imports from China, the world's biggest steel producer.
The news emerged at the Rotherdam summit yesterday, which was arranged by the government to discuss the critical issues faced by the steel industry, following the closure of the Redcar steel works in east England earlier this month affecting 2,200 direct jobs.
The UK subsidiary of Thailand-based Sahaviriya Steel Industries (SSI), the operator of Europe's second-biggest steel plant at Redcar in Teeside, was put into liquidation after the government refused to provide financial aid to the indebted company.
Most of the anticipated job cuts are expected to be at Tata Steel's Scunthorpe plant in north-east England, which makes bloom, billet and slab, medium sections, rail, wire rod and plate, according to the media.
Reports also speculate loss of positions at rolled steel plate facilities in Dalzell and Clydebridge in southern Scotland.
Responding to media reports on the job cuts, Tata Steel said the company would not comment on rumours and speculations.
After the summit, Tata Steel Europe's chief executive Karl Koehler said he would not confirm the job losses in Scunthorpe and Scotland, saying, "Today was not about announcements.''
"When we have something to announce we will do it in the appropriate fashion, as you know," he said.
However, an announcement on the matter is expected early next week.
"Clearly this is extremely worrying news for all those who may be affected. We'll be seeking further discussions with Tata Steel to understand the full detail, examine alternatives that may safeguard jobs and uphold our principle of opposing compulsory redundancies,'' Roy Rickhuss Community union's general secretary told Harborough Mail newspaper.
He also said the union would be seeking an urgent meeting with the Scottish government to discuss what support they could offer to the mills at Dalzell and Clydebridge.
Assistant general secretary of Unite, the country' biggest trade union, Tony Burke said, ''We will be consulting urgently with Tata over potential job losses and will leave no stone unturned in protecting our members' jobs and steel making in the UK.''
The top-level summit, attended by ministers, business leaders and unions has agreed that further joint work is urgently required in three areas including public procurement, international comparisons and competitiveness and productivity.
Business secretary Sajid Javid said, ''There is no straightforward solution to the complex global challenges facing the steel industry.''
''The government is committed to working closely with industry on both short-term and long-term issues and to doing everything we can to support both industry and the workers,'' Javid assured.
Global over capacity and fall in demand due to the slowdown in China has unleashed a supply glut for the commodity at cheap prices.
The price of steel has halved over the past one year. Besides, the UK steel industry is under pressure from the devaluation of the Chinese yuan and Russian rouble.