The FTSE 100 just closed down by 0.11% at 6,345.13 in London, pulled lower for the second consecutive day by mining companies.
Investors pulled out of many of the metal-heavy mining stocks on Tuesday as falling commodity prices hit another British steel company.
Tata Steel announced today that it is going to cut 1,200 jobs its plants in Scunthorpe and Lanarkshire. This comes after the 98-year-old Redcar steelworks in the North East closed down at the expense of 2,200 jobs. Meanwhile, parts of Caparo Industries’ steel operations are going into administration and 1,800 people are set to lose their jobs.
Steel prices have fallen to their lowest levels in 12 years and a range of British companies are struggling to survive. The industry blames China’s glut of production and imports for pushing down prices. This is because prices in Europe and Asia are so low, Britain can’t compete. It’s just cheaper to import it in because it’s too costly to produce it in the UK.
On the flipside, falling global demand and a strong pound makes steel exports relatively more expensive. Britain is in the worst spot, right now.
Metals mining company Vedanta Resources closed down by nearly 8% while Anglo American, BHP Billiton, and Rio Tinto all closed in negative territory.
The drag on the FTSE cancelled out all the positive gains from companies such as InterContinental Hotels Group which closed up by nearly 7% on a set of positive results.
Here’s a snapshot of the rest of Europe:
German DAX: -0.18%
French CAC: -0.66%
Eurostoxx 50: -0.5%