British Steel’s Chinese buyer is considering building a new metals recycling furnace on Teesside, a move which would bring steelmaking back to an area that has suffered decades of industrial decline.
Jingye hammered out an agreement with trade unions on new employment terms this week as part of its planned turnround of the failed manufacturer, which will involve £1.2bn worth of investments but also up to 500 job losses — roughly 10 per cent of the workforce.
The Chinese conglomerate hopes to conclude its takeover of the UK’s second-largest steelmaker by the end of next month. It is looking at the possible installation of an electric arc furnace at one of the company’s smaller factories in Teesside, north-east England, according to people aware of the plans.
If the proposal goes ahead, it would herald the return of crude metal production to a region with a proud industrial heritage, but whose 170-year history of iron and steelmaking ended when the nearby Redcar blast furnace plant shut in 2015.
The closure caused 3,000 job losses and left behind vast tracts of despoiled land at what has been described as the UK’s biggest regeneration site.
Securing the future of British Steel is a priority for the UK government, in line with prime minister Boris Johnson’s pledge to “level up” regional economies. Many former Labour heartlands with manufacturing legacies, including Redcar, turned Conservative in last year’s general election for the first time in decades.
The Teesside beam mill processes basic metal, supplied by British Steel’s main plant in Scunthorpe, into products for the construction industry and employs 400 people. An EAF would make it capable of producing its own primary material.
Unlike blast furnaces that produce virgin steel from raw materials, EAFs melt scrap steel and are smaller, less costly to build and more flexible. They also emit less carbon dioxide, but consume huge amounts of electricity.
“This should reduce costs and maybe increase competitiveness,” said one person familiar with the Teesside factory.
However the new furnace would “definitely not” be intended to replace Scunthorpe’s blast furnaces, said one of the people aware of Jingye’s thinking. Jingye declined to comment.
The Community trade union this week said that Jingye’s investment plans would be “transformational” and secure British Steel’s long-term prospects.
Since it collapsed into insolvency in May, British Steel has continued to operate under the Official Receiver, an officer of the UK Insolvency Service, with funding through a taxpayer-guaranteed indemnity estimated to have cost tens of millions of pounds.
Jingye’s accord with unions this week marked an important step in its rescue. The deal includes a retention bonus paid to workers in their first year under Chinese ownership and no changes to shift premiums or take home pay. Alasdair McDiarmid, operations director at Community, said it was a “better deal for employees than what was otherwise on the table”.
An unsuccessful bidder for British Steel, Sanjeev Gupta’s Liberty House, wanted to gradually shift Scunthorpe away from blast furnace production to electric arcs, but the likely job losses as a result were a factor in the offer being turned down.
Ben Houchen, the Tees Valley Tory mayor, recently promised to bring steelmaking back to Teesside when launching his campaign for re-election. Earlier this month the government committed £71m, bringing to £208m so far the public sector support to turn the Redcar site into a hub for new industrial users.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
