Late last month, Britain’s largest producer Tata Steel announced that it is likely to close its operations in the country. This announcement threatens the jobs of more than 4300 workers in the town of Port Talbot in South Wales. The plight of UK’s steel industry reflects the condition of the global steel market as well.

Market analysts blame China, the largest producer and consumer of steel in the world, for dumping its steel in foreign markets. According to the International Steel Statistics Bureau, steel production in China in the last two years has exceeded Britain’s total production since 1900. Data from the China Iron and Steel Association shows that 112 million tons of China’s total crude steel output of 803 million tons was exported last year.

In fact, steel production in the developing world is growing much faster than in the advanced world. In contrast, production costs are too high in the West to make steel a viable business. Factors like high taxes, energy expenses, and salaries contribute to the high operating costs.