British Steel will encourage suppliers and customers to deal in euros from January, the planned launch date for European economic and monetary union (EMU).
About 30% of the group’s turnover is in mainland Europe and the international steel group is a large receiver of European currencies.
‘We’ll be exposed to the euro from 1 January 1999, so we’ve put systems in place to buy or sell in euros,’ said a British Steel spokesman. ‘Although it will not impose the euro on any of its suppliers or customers it will use the currency if there is a common agreement to do so.’
Discussions have not yet taken place with suppliers or customers.
Exchange rate losses were a big factor in cutting group pre-tax profits from £1.1bn to £450m last year. By using the euro, British Steel hopes to claw back some losses.
Payment for raw materials iron ore and coking coal will remain in US dollars, the currency in which these are traded world-wide.