Tata to close Scotland's last major steel plants in restructuring of UK operations

Tata Steel is planning to close one of Britain's biggest steel plants as cheap imports and high energy costs mount pressure on British steel companies and make domestic production non-competitive.

Tata Steel will close its Clydebridge plant in Cambuslang, Scotland, where it employs about 400 people, including about 350 at the Dalzell plate rolling mills in Motherwell.

The firm is also expected to significantly reduce the workforce at its Scunthorpe steel plant in the north of England, which employs 3,000 people.

Together, the Indian steel giant is expected to announce 1,200 job cuts at its plants in the UK next week, according to British media reports (See: Tata Steel to axe 1,200 jobs in UK).

The Dalzell Steel and Iron Works opened in 1872, and Clydebridge in 1887 were two of the giants of Scottish industry, with Clydebridge providing steel plates for building some of the most famous ships built on the River Clyde.

Tata Steel is expected to confirm next week that the jobs at its plants in Motherwell and Cambuslang will be among more than 1,200 being lost across the UK.

"We've made a number of structural changes to our UK business over the last months and years to make us more competitive. Like all companies we continue to review the performance of our business," a Tata Steel Europe spokesman said.

The closure of the steel plant is a loss of identity for many Scottish communities as they still identify themselves by the industries that have been operating for decades. For them, the expected closure of steel plants in Motherwell and Cambuslang has a familiar, grim feel to it.

But there is no recourse - China has the capacity to make 1.1-billion tonnes of steel each year, of which around a third is in excess of demand. The excess capacity is dumped into the global markets,  at prices that are the lowest in 11 years.

Chinese steel plants undercut even the most-cost efficient plants elsewhere. Against this, the costs in Europe and the West in general are pretty high.

With steel prices at their lowest level for 11 years and the pound and the dollar ruling high, it makes sense for the UK and US to import Chinese steel.