October 20, 2015 / 9:39 AM / 2 years ago

Tata Steel says may cut about 1,200 UK jobs in restructuring

A Tata Steel sign is seen outside their plant in Scunthorpe northern England, October 15, 2014.Phil Noble/Files

LONDON (Reuters) - Tata Steel(TISC.NS), the biggest steelmaker in Britain, may cut about 1,200 jobs as part of plans to restructure its struggling operations, it said on Tuesday.

The move would be another blow to the UK steel sector, hit by weak steel prices, after the liquidation of the UK's second-largest steelmaker SSI UK was announced this month.

Tata plans to halt production of steel plate, which would lead to about 900 job losses in Scunthorpe in northern England and 270 in Scotland, plus a small number at other sites, it said in a statement.

Scunthorpe, which produces steel mainly used in construction and infrastructure projects, is part of Tata Steel's loss-making long products unit, which the company is trying to sell. The unit employs about 6,500 people.

"We have looked at all other options before proposing these changes," said Karl Koehler, chief executive of Tata Steel’s European operations.

"This comes in response to a shift in market conditions caused by a flood of cheap imports, particularly from China, a strong pound and high electricity costs."

Tata Steel, Europe's second-largest steel producer, has cut thousands of jobs since it bought Anglo-Dutch producer Corus in 2007.

Tata's decision puts more pressure on British Prime Minister David Cameron, who said on Monday he would raise the issue of subsidised steel with China during a visit to Britain this week by President Xi Jinping.

“The prime minister can demonstrate that he is prepared to lead this commitment by stepping in this week and pressing the Chinese premier about the dumping of under-priced steel which is one of the major factors killing our industry,” said Gareth Stace, director of industry lobby UK Steel.

Reporting by Eric Onstad and Maytaal Angel; editing by Jason Neely

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