Times Warns of a Further Threat to the Economy

TE Tes eo on industrial correspondent. The Times (14 September) warns that Britain is heading for grave difficulties in the steel industry as the 10)‘ import surcharge is removed at the end of October. Such worning signs of crisis at a time when the Government is already cutting back the economy underline the cangerous situation into which we shell move at the start of the winter period. Says the Tines: "A flood of cheap foreign stecl will come into Britain directly the 107 surcharge is removed. -\lrecdy the forwerd orders that have been placec are sufficient to pose a major problem for the industry and current imports are very high. The Iron and.Steel Boord is watching the situation closely. If the winter imports rush threatened in steel is repented even to a lesser dégree in other srecs of business it is clear that the removel of the 10% will have serious repercussions upog the overall trade balance. ‘Between Jmucary and July this year Britain's steel imports reached 477,000 tons fer higher that the 300,000 tons imported during the s:me period last year. Leading steclnakers now take the view that the rate of imports must continue to rise, having regard for the state of world steel trading; and that an imports upsurge of frightening proportions will be seen immediately following the abolition of the 10)’ temporary duty. Before long steel imports could be running at 10-15°’ of the British industry's 500,000 tons a week current productions rate. During June and July (the latest availeble figures) steel imports into Britain hovered between 77,000 tons and 82,000 tons a month, which is twice the average rate for the first mrt of the year. The biggest increases in imports during the year have been in steel sheets, light sections and steel tubes. “The British industry cen look back upon a similar cycle three years ago when the price of world steel offered in export markets fell rapidly and was aceompanied by a swift rise of Britain's steel imports. Theat yeor steel sheet imports shot up within 2 few months from 13,000 tons = month to 52,VvV0 tons a month. It is not an exagrerati6n to say that all major steehaakers. in Britain, Europe, and Japan are nearing their wits' enc trying to stop the continuing rot in steel prices. The 30’ differentixl between export and home prices is inevitably eroding their home prices now. The Europeans are resorting to selling cnrtels but that traditional defensive onswer of big business is not proving satisfactory. For instance, it does not work when trading into ast urope. Also the entrepreneurs of steel, mostly tbading through big ports like Antwerp cre in a position to kick holes in most defensive moves practised by the steelmakers. "There is always a steady trede in sheet steel into Britain from the Ijmuiden mill in Holland. British car makers like an alternative supply. In fact the Dutch sell at ruling British prices and the truce is in no wey regarded as Sinister by the British steel industry. But the new imports of steel thet are now being signed up for delivery after October cre in cuite a different category. They are from export-oriented steel mills in Belgium, Austria, Vest Germany and elsewhere. They may pass through middlemen so that their origin is difficult to determine. The British steelimakers are going to try to prove that some of these imports will be “dumped” i.e. sold at below ruling home prices of the nations of origin. But ruefully the British steelmakers admit they will have great difficulty in proving cumping so that the Board of Trade can act. Origin of the steel imports mey be obscure. Even if origin is prove the ruling home price may be obscure because of the flexibility of European pricing. Then, the foreign producers can clain that their low price takes account of hidden discounts given to their home market customers".