Tata Steel shutting down operations in the UK would leave a hole in manufacturers' supply chains.

Reuters today carry an article that highlights the problems facing many UK operations should those steel plants close their doors for good. The UK steel industry, the product's birthplace, has been in decline for many years with the loss of thousands of jobs but this final blow has wider repercussions.

India's Tata Steel, Britain's biggest producer, has now put all of its UK operations up for sale, including the country's largest steelworks at Port Talbot which is losing $1.4 million a day due to depressed steel prices and high costs.

Since 2001 imported supplies have met more than half of its domestic demand, according to the International Steel Statistics Bureau (ISSB), as local producers struggled with high energy costs, green taxes and fierce competition. Germany is the biggest foreign supplier of steel to British manufacturers and construction firms, followed by China, Spain, Belgium and the Netherlands, the ISSB said.

China has flooded European markets with cheap and inferior steel as a result of its own falling demand while the US has slapped on Chinese steel import tariffs in excess of 200%

Britain imported 826,000 tonnes of Chinese steel in 2015, up from 361,000 in 201 and according to the ISSB, China has produced more steel in the last three years than Britain has since the industrial revolution.

Those British steelmakers that remain have been kept going by local manufacturers, a resurgent car industry and foreign demand.

"Hot-rolled coil is produced at Port Talbot and that predominately goes into the automotive sector ... that's the bodywork," Dominic King, head of policy and representation at industry group UK Steel,

Five carmakers built almost 99 percent of Britain's 1.6 million cars last year and all source steel from Port Talbot, with some already looking for alternatives should the site shut.

More from Reuters here

The UK government has kowtowed to China in an attempt to secure lucrative infrastructure investment/contracts and now faces political and moral pressure to save the UK steel industry from total wipe-out. This morning Business Secretary Sajid Javid said that the government,

"will look at everything we can do to allow a sale going ahead. I wouldn't rule out anything at this stage".

but asked to guarantee that the plant would stay open, he did not, saying: "I will do everything I can to keep this plant open."

Labour is calling for the industry to be temporarily nationalised, with shadow fin min John McDonnell suggesting the government could maintain a stake in the plant after a buyer was found. However, Javid said that nationalisation was "rarely the answer".

The BBC runs the story and some excellent background here

These are sad times for the UK manufacturing sector and while it's the services sector that accounts for most GDP that imbalance is not going to change anytime soon.