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Oh no. Here we go again. Clouds are once more hanging over the UK's steelmaking industry.

First came news last week that Indian-owned Tata Steel, the country's biggest steelmaker, must abandon plans to pool its European steel operations with those of German giant Thyssenkrupp after the European Commission indicated it would block the deal.

The combination would have created Europe's second-largest steelmaker after ArcelorMittal and would have ensured a degree of stability for Tata's UK employees, including 4,000 or so working at the site at Port Talbot, in south Wales.

Instead, there is now more uncertainty, particularly in view of Tata's admission that the operation is still consuming cash rather than generating it.

Now comes news that the UK's second-biggest operator, is seeking a £75m loan to stave off collapse.

:: British Steel begs for taxpayer funds to avert collapse

The business, rechristened British Steel after the investment firm Greybull bought a package of assets for £1 from Tata Steel in September 2016, may even go into administration.

So are the two situations connected? Well, yes and no.

British Steel does have some problems unique to it, chiefly a rash bet it made on the EU's emissions trading scheme, under which it sold a number of the allowances with which it is required to match each tonne of CO2 its operations emit.

British Steel had more allowances than it needed for the expected CO2 emissions produced by its UK operations.

But it was caught out when the EU - which issues the permits - put a temporary suspension on new allowances being issued to UK companies until the Brexit withdrawal agreement was completed.

This, along with an unexpected surge in the price of the allowances to their highest level in a decade, has surprised the company. The Financial Times reported last month that the allowances sold by British Steel would now be worth £138m.

Faced with a shortfall in the number of allowances it needed, exposing it to a potential fine from the European Commission, British Steel turned to the government for help.

Greg Clark, the Business Secretary, gave the group a £100m loan, telling the House of Commons that the company was facing a fine of £500m as well as an estimated bill of £120m for buying the carbon permits it needed.

The latest request for funding apparently reflects a slump in orders.

The group's latest plight will raise questions about the underlying strength of the business.

The operations now called British Steel were on the verge of being closed by Tata Steel until Greybull stepped in to buy them.

Yet, under its new owner, British Steel has not found life straightforward. In its first year under the new owners, it reported earnings before interest, taxation, depreciation and amortisation of £47m, up from a loss of £79m on the same measure a year earlier.

However, it later emerged that Greybull had lent the business £154m, charging a rate of interest of 9.6%. That was quite a burden for the business to carry.

Just before Christmas 2017, meanwhile, British Steel slipped out news that Peter Bernscher, its chief executive, had quit after differences of opinion with the owners.

That was one of a number of difficulties Greybull suffered. Another was production delays, caused by machinery failures, in the summer of 2017 that are estimated to have cost the business tens of millions of pounds in lost sales.

Last summer saw British Steel announcing what it said was its biggest single investment for a decade, a £50m injection into the production of wire rod at Scunthorpe, but this was accompanied by news of a fall in earnings to £21m.

Shortly after that, in September last year, British Steel announced it was cutting 400 jobs - effectively one in 10 roles across the business - in a bid to save costs. One of the factors it cited was the fall in the pound which, because a lot of the raw materials the company uses are priced in dollars, had pushed up costs.

This is where the issues common to both Tata Steel and British Steel come in.

The persistent weakness in sterling is a key factor.

Another is a rise in iron ore prices globally, due to a shortage following the collapse in January of a dam operated by Vale, the Brazilian miner. Iron ore prices are currently trading at close to $100 a tonne, the highest they have been for four years, with the shortfall from Vale's operations not expected to be made good by other miners in the short term.

Higher energy costs - British steel producers, due mainly to environmental charges, pay substantially more for their electricity than their counterparts in Germany or France - and the higher price of carbon permits are also adding to the burden.

Overlaying all these factors is that there remains vast overcapacity in the global steel industry.

According to the World Steel Association, world steel production during the first three months of the year was 444.1 million tonnes, up 4.5% on the same period in 2018. Yet global steel demand is not growing nearly so rapidly.

The World Steel Association estimates that, while global demand for steel rose by 1.8% last year, it will grow by just 0.3% this year and by 0.7% next year, reflecting slower global growth and lower demand from specific industries, such as shipbuilders and car makers in South Korea.

So clearly supply is outstripping demand which, all things being equal, should bear down on prices.

Much of that excess production is coming from China which, in March alone, produced 80.3 million tonnes of steel - up 10% on the same month last year.

For the three months as a whole, Chinese production was 231 million tonnes, a record. This presents a problem for the rest of the world and is one reason why both the US and the EU have in recent years introduced measures aimed at preventing China from 'dumping' cheap steel in their markets.

The EU and US have also imposed tariffs on steel imports from each other. China, for its part, argues that 85% of the steel it produces is for domestic consumption only.

Worse still, production capacity continues to increase. Part of this reflects investment by producers in better quality products - like the wire rod investment by British Steel at Scunthorpe - in the hope of better profit margins.

It also reflects producers in locations like the EU seeking to raise production levels by putting in new equipment or production processes and also investment by producers in China and Russia to raise the quality of their products.

All of these activities add to global steel production without doing anything to lift steel consumption - while a final factor is that some emerging markets, notably in Africa, are also putting on capacity of their own that did not previously exist.

And things could get even worse for British producers. UK Steel, the trade body, estimates that a 'no deal' Brexit would result in quotas or duties in markets accounting for 97% of UK steel exports - up from 15% at present - which, with nearly half of all steel in this country being exported, would bite.

It is hard to see how, ultimately, steelmaking in this country can survive such headwinds in the long run.