Steelworks in Port Talbot, Wales, owned by the Tata Group, one of the foreign firms ‘investing in the UK as a key player in Europe’. Photograph: Anthony Devlin/PA

Britain’s hard-pressed manufacturers have expressed growing unease that the financial sector was defended in Europe by David Cameron at the expense of Britain’s industrial interests.

Steelmakers fear the UK could lose its "leadership" position on issues such as deregulation and competitiveness, while other manufacturers fear a growing isolation from a key market.

"In the short term it should make no difference as all the EU structures are in place, but across the longer term … we are going to become less relevant in political decision-making," said Ian Rodgers, director of the trade body UK Steel.

Read the full story by Terry Macallister at the Guardian

Whilst David Cameron and the Government have made a lot of noise recently about taking measures to help Industry and manufacturing their actions show that their traditional loyalty to the city is far stronger. Our largest export market is Europe and any step that weakens our influence within that market is a betrayal of the manufacturing sector.

Staff at Caparo Merchant Bar (CMB) in Scunthorpe have agreed to take a longer, partly-unpaid, holiday over the Christmas and new year period.

Workers are being supported by the Community Trade Union in an effort to help the company.

The move aims to ease the company’s wage bill in the process.

Full story at BBC News

Tata Steel said the temporary mothballing of the mill at its Llanwern site in Newport, will take immediate effect.

The move will lead to the loss of 115 agency workers, contractors and others on fixed-term contract jobs.

Tata Steel said the facility is expected to remain mothballed until the UK economy and steel demand justify a restart of operations.

Read More at Wales Online

Report Courtesy of MEPS

The most recent MEPS report sums up the situation

EU buyers are reluctant to place orders on the mills as concern over the current financial crisis is undermining business confidence. They believe that prices could go down even further and so are staying out of the market for now. Because demand is so mediocre, the output cuts that European producers have implemented so far have not had any positive effects on basis values. However, more are planned by several steelmakers.
The German strip market is described as “difficult”. Activity has not recovered from the lows experienced during the summer. End-users are postponing orders. Service centres are keeping inventories low because they are unclear about the direction of prices. Many of them purchased third country imports earlier in the year when values were higher. This material is now arriving and they are forced to sell at a discount. Domestic mills have reduced their offers for now. They will curb capacity to try to stabilise the market.
Given the current economic and financial uncertainty, French buyers remain very cautious, even if stocks are run down. This trend is not expected to change, with the end of the year looming. There is some demand from end-users but they are challenging distributors’ resale prices. Ex-mill basis values are also under pressure. The producers appear to be unwilling to drop them any further, preferring to adjust their output instead.
The Italian economy is very weak and turmoil in the financial markets has dampened sentiment significantly. Delivery lead times from the domestic mills are short. Stocks at the ports have gone down substantially. A favourable exchange rate has been shielding the Italian producers from new import competition as well as helping them to export.
End-user demand tends to be sector specific at present in the UK. Distributors’ margins are poor as resale values are continually weakening. Ex-mill figures are fairly steady because producers realise that further discounts are unlikely to generate more business.
The capacity reductions are taking time to have any positive influence on the Spanish market, where the threat of recession has caused business confidence to evaporate. Activity has not picked up, with buyers placing small orders only when they are desperate for material. Traders are finding it virtually impossible to find new third country offers at competitive rates.

Despite earlier market expectations to the contrary, European demand has not picked up following the long holiday break. This is partly due to grave concerns over the financial situation across the region. The mills are experiencing low levels of order entry and, consequently, some production cuts have already been announced. ArcelorMittal has idled several of its blast furnaces in France, Belgium and Germany. This may also have to happen at other European sites. Producers have signalled their intention to push up strip mill prices for the fourth quarter but the success of this initiative is questionable. Third country material, booked earlier in the year, is now starting to arrive at the docks but the import threat, as far as new orders are concerned, has receded.
There are fears of a serious slowdown in the German market. The summer months of July and August have been exceptionally quiet. End-users have work for now but their forward order books are looking thin. Buyers are reluctant to place steel business before they can clearly see the direction of prices in the final trimester. Current domestic spot market values are slightly below those tabled in July.
Activity remains sluggish in the French market in early September. There is little enthusiasm to purchase, especially with today’s economic turmoil. Distributors are working with the steel they have in stock. Nonetheless, producers have been talking about increases. However, buyers do not believe the current market situation can justify any advances.
In Italy, Riva, Marcegaglia and Arvedi have announced price hikes for strip mill products with immediate effect. However, in reality, there has been continuing weakness during the summer. The economic chaos, widespread through the eurozone, is worrying customers, who see no hope of improvement in the steel industry in the near-term, either at home or abroad. Consumption is at a low ebb.
The UK market is described as “weak and depressing”. Producers reacted to a lack of orders by slashing prices, week on week, through August but things may have settled now. Customers who took advantage of these opportunities are now covered for most of period four. Distributors report that business is as tough as ever, which is a reflection of the general economic situation. Their resale values are under considerable pressure.
The Spanish scene is described as “dreadful” with a continuation of July’s total lack of activity. Confidence is very low. Service centres report that they are selling less than in the first two quarters because end-user consumption is dire.

The German mills are not so dependent on the commodity grades as their rolling schedules are full with orders for the more exotic qualities for the next three months and beyond. Wind tower and line-pipe markets are particularly busy. Consequently, producers have held on to prices for commercial material, although customers are pushing for discounts by quoting cheap Chinese offers.
European cold rolled coil demand shows no signs of revival. Customers are wary of placing new business because they anticipate that prices could go even lower.
Although underlying consumption is good in Germany, most buyers have postponed order placement in the hope of cheaper prices in the latter half of the third trimester. As a result, the mills have offered substantial discounts.

More detail in the full report here

The Markit/Cips manufacturing purchasing managers’ index (PMI) for June fell to 51.3, down from May’s downwardly revised measure of 52.0. A figure above 50 indicates expansion.

Markit said that growth was "stalling", with weak domestic demand and the recent boost to exports now fading.

However, there were signs that inflationary pressures had eased.

"The manufacturing sector continued to slip closer to stagnation in June," said Rob Dobson, senior economist at Markit.

"The data will call into question the sector’s ability to play a major role in delivering a robust and sustainable economic recovery."

More at BBC News

Total world production was 1,413.5 mmt in 2010, up from 1,230.9 mmt in 2009.

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