It has already unveiled losses of pounds 51m for the six months to September 1992, almost equalling those for the whole of the preceding year. In October, it passed on the interim dividend, promising at the same time to pay a final dividend of at least 1p, though probably no more.
Yet despite a performance that is dismal compared with the glory days of 1990, when it made a pounds 733m profit, the share price has been on a roll since the interims. Within months, it doubled from its 8 September low of 46.5p, outstripping the rest of the FT-SE 100 index by a wide margin, and in the middle of May it broke the pound barrier.
The devaluation of sterling and two price increases - with another in the offing in July - partly account for this return to favour. However, considerable hope has also been pinned on the EC's latest emergency plans for restructuring the industry.
Fernand Braun, the EC's steel representative, estimates that European steel production needs to be cut by a fifth, to eliminate 30 million tonnes of capacity by 1994. If implemented, the cuts would lead to more than 50,000 job losses and a total bill of nearly pounds 5bn to cover redundancies and plant closures.
The move to restructure has been prompted by a 30 per cent slump in steel prices since 1989, as recession eats into domestic markets. Producers in Western Europe have also been hit by a flood of cheap imports from the former Eastern Bloc countries and the imposition of US anti-dumping duties.
The impact on even the most efficient producers, among which BS undoubtedly ranks, has been disastrous. Ian Lowe, an analyst with Smith New Court, estimates that BS's average selling price was 10 to 15 per cent below the cost of production in late 1992, with a loss at that point of more than pounds 250m a year. Deriving a figure for the EC is impossible, he adds, but 'calculations of an annualised loss of between pounds 2.5bn and pounds 5bn are not unrealistic'.
Marginal price rises have since provided a little relief and, fearful of having cuts unilaterally imposed, a number of companies have been scrambling to reach some sort of compromise before a meeting of EC industry ministers on 30 September.
Optimists point to the progress that has already been made. Germany, for example, has just pared 4.5 million tonnes from its steel production. Proposals are also afoot to form regionally based European Economic Interest Groups. These would control volumes and enable producers to buy excess capacity that, theoretically at least, they would then close. In effect, the big producers of the north - Britain, France and Germany - would bankroll the restructuring of the industry within their own region, leaving the EC to sort out the more troubled steel makers in the south.
But, with almost half the manufacturing assets of the European steel industry under state control, the danger is that politics will prevail over economics. The EC bans subsidies from national governments or from Brussels, except where substantial reductions in capacity can be shown. But the restructuring plans put forward by a number of state-owned companies contradict the spirit of this law.
Italy's state-owned Ilva, which lost dollars 1.7bn ( pounds 1.1bn) last year, plans to split its balance sheet, in the process transferring more than pounds 1bn of debt. It has vigorously defended its plans, claiming it is now privatising itself and that the move does not constitute state aid.
In response to EC requests for capacity cuts, Hayao Nakamura, the new head of Ilva, added: 'We could sell 100 per cent of our production in Italy, so why should we cut output? For the sake of the Italian public or the sake of the German public?'
Germany itself has not been entirely blameless. State assistance to the tune of DM380m ( pounds 151m) was granted to EKO Stahl, the former East German steel manufacturer, only a day after the EC had rejected a request to approve the investment.
Redundancies arising from any restructuring are another issue. In Spain, for example, 25 per cent of the workforce are out of a job. The state-owned CSI, one of the biggest candidates for a bail-out, requested more than pounds 3bn in assistance from Brussels in return for a 31 per cent reduction in capacity and a 39 per cent cut in staffing, but it is resisting a larger reduction being demanded by Brussels as a condition for this aid.
The EC has indicated some willingness to horse trade. With the write-off of a DM70m debt at Klockner-Werke, in return for capacity cuts, it is widely expected that co-operation from Ilva and CSI will be greeted in the same spirit. The next crucial step in the negotiations will come in mid-July, when the Council of Ministers meets in an attempt to deal with the most important state-aid cases.
For BS, as for the other large producers, big money is at stake. Although the company may never return to the giddy heights of 1990, more bullish analysts think that in the wake of a successful restructuring, profits could surge to pounds 400m by 1994/5. Were this to happen, British Steel would be more like gold.
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