British steelmaker Caparo partially enters administration

Much of British steelmaker Caparo was placed into administration on Monday as unions proclaimed a "crisis" in the industry, which is struggling to remain competitive against cheaper international steel.

Administrators were appointed to 16 out of about 20 companies within the Caparo Industries group, audit firm PricewaterhouseCoopers said in a statement.

There were fears of hundreds of redundancies in the Caparo firms, which include companies that make metal wire, tubes, and fastenings, as well as products for cars and aeroplanes.

The firms' over 1,700 employees would be "briefed on the impact of administration", PwC added.

"Staff are attending work as normal and will be paid as normal, so in these respects it is business as usual while the administrators' review gets underway," the PwC statement said.

The news comes ahead of an expected announcement by India's Tata Steel of 1,200 job losses in plants in Scotland and the industrial English town of Scunthorpe.

Previously, 2,200 jobs were lost when the Thai-owned steelworks Redcar in the north east of England went into liquidation.

"This news is another devastating blow to Britain's steel industry," said Roy Rickhuss, general secretary of steelworkers' union Community.

"This is an industry-wide crisis. It is vitally important that Britain's steel companies hold their nerve and that government works with unions and the industry to build a sustainable future for UK manufacturing with steel at its heart."

PwC said that low steel prices and uncompetitive exchange rates had hit some parts of the Caparo group harder than others.

Trade unions have urged the British government to intervene to save the steel sector, which employs 30,000 people in the country but faces gruelling competition from China.

Prime Minister David Cameron pledged to raise the issue of "dumping" of cheap steel with Chinese President Xi Jinping, who is visiting Britain this week.

"We voted in favour of dumping tariffs against the Chinese and we'll do everything we can to help our steel industry," Cameron said in parliament.

"Will we raise it with the Chinese? Of course, we'll raise all these issues. That is what our relationship with China is all about."