CRU: Loss-making British steel plant closes down

“Our UK operations have faced many challenges for several years, including unpredictable and high energy costs compared to our competitors, lack of demand for our product manufactured in the UK, and increased imports of rolls and flat-rolled steel into Europe from low-cost countries,” said Sam Lyon, president of Union Electric Steel (UES), the Ampco-Pittsburgh subsidiary that runs the cast rolls business.

“These headwinds created an unsustainable loss-making position for the past three financial years, with further losses expected for 2025 and projected beyond, had we not exited.”

Ampco-Pittsburgh’s CEO Brett McBrayer conceded recent tariff volatility affected demand and order timing in the business. So the group accelerated a planned exit from the UK.

“This action … removes excess capacity from our portfolio and the marketplace,” he added. “As a result of the UK exit, capacity utilisation at our Sweden cast roll facility will increase significantly.”

Unions representing workers at the plant, formerly known as Davy Roll, say employees will lose thousands of pounds by the early closure: shutdown was planned for next April.

By accelerating closure plans through administration, redundancy agreements made in February with unions are now invalid, according to chroniclelive.co.uk. The local news website also reported 65 staff have been made redundant immediately with around 90 kept on to complete current orders being processed.

Union leader John Guy said: “Workers are devastated … We understand the parent company has been hamstrung by Trump’s tariffs, but this whole situation has been handled disgracefully.”

UES present Lyon also said in a statement that talks with the British government and seeking a sale failed to find a sustainable solution to keep the Gateshead plant operating. “After thorough consideration and having explored all options, we concluded that an exit was the only viable path forward to ensure a strong future for our remaining operations,” he added.

The decision will mean the company recording a charge of around $44 million in its Q4 financial results, but also an annual improvement of $7 million to $8 million in adjusted EBITDA in the future, said CEO McBrayer.

The action is confined exclusively to the UES-UK subsidiary and Ampco-Pittsburgh says affect the company or its other subsidiaries are unaffected. Lyon stated UES will continue to support customers from operations in the US, Sweden, Slovenia, and joint ventures in China.