The steel industry faces being plunged back into crisis as US import tariffs hit and measures to prevent a flood of cheap steel into Europe are too slow to save companies from falling profits.

The warning comes from heavyweight broker UBS in a comprehensive note on the steel sector, which predicts the benchmark price of steel will drop by about $100 (£75) to around $450 per tonne by the end of the year.

“Rising inventories, higher net exports of Chinese steel and higher imports into the EU owing to steel trade frictions with the US and steel price differentials should bring an end to the two-year recovery of EU steel,” said UBS analyst Carsten Riek.

Steelmakers in the UK are only just recovering from the crisis of 2015 when a flood of steel from subsidised Chinese plants, high energy prices and rising labour costs combined to cause thousands of job losses in the sector.

Last week’s introduction of 25pc tariffs on the import of steel into the US is likely to cause steel originally destined for America redirected to Europe, according to UBS.