Britain’s struggling steelmakers face years of “hell”, according to experts, with the crisis in the industry showing no signs of letting up.
Brokerage Jefferies said the past year “has felt like hell” across the global steel industry and warned it is unlikely there will be any short to medium-term relief from the pressures that have claimed thousands of British jobs.
In a comprehensive 203-page examination of the industry, analyst Seth Rosenfeld said: “Dante wrote ‘The path to paradise begins in hell’ but we must determine which level of hell we are at to judge how close we are to the end.
“With Chinese demand contracting, trade policy providing limited salvation and ‘bull case’ restructuring bringing years of volatility, we have far to go before reaching the ninth circle.”
China has a huge steel over-capacity as a result of the country’s economic slowdown, meaning it dumps commodity output abroad. Having peaked in 2013, China’s demand for steel has declined 8pc since 2013, according to Jefferies, with the brokerage forecasting a further 2pc drop this year.
However, production outside the country – the world’s largest steelmaking nation, producing about half of the 1.6bn tonne total - has fallen only 4pc in the past two years, though exports have surged 79pc, acting as a “release valve”.