Letter: Attack on the bedrock of UK manufacturing

Sir: What business in today's market-place can increase its prices by more than 40 per cent? The European steel industry. Our company is a not untypical engineering company, supplying fabricated and machined products to a variety of markets from defence to leisure. We have survived the recession by prudent management and a shift in emphasis to exports and new products. We employ 50 people. All this could be in vain now that the steel industry is implementing a 40 per cent-plus increase in its prices.

Our markets are extremely fragile - no 'green shoots' here - and major customers refuse to accept any price increases. So we are faced with a huge increase which, because of our small purchasing power (5 tonnes per month), we can do little to resist and our large customers refuse to accept. We have made inquiries of non-EC countries to see if we can purchase two or three months' supply. Consistently we are told they cannot supply or must be careful on price because the EC mills may cause problems for them. So much for a free market and competition.

This increase, reasons for which range from huge demand from China to capacity reduction, is nothing more than the actions of a price cartel of European bullies who take no notice of the realities of the European market. No doubt, prices paid by China will be extremely low, and we are being asked to support the steel mill margins. Apart from being inflationary, this hits the medium to small user, the bedrock of UK manufacturing industry.

Your faithfully,

T. F. BARNES

Managing Director

Dixon-Bate

Deeside,

Clywd

15 April