SSI Redcar steel plant production 'paused'

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Media captionSteelmaking on Teesside has been "paused" says SSI

Production at a Teesside steel plant which employs up to 2,000 people will be "paused", the company said.

Thai-based SSI took over the former Tata Steel complex in Redcar after it was mothballed in 2010.

The company said preparations were under way to cut production during the day and cited ongoing issues with the supply of raw materials and services.

A spokesman said the announcement was made with "great regret" but a union leader described it as "devastating".

'Devastating news'

Operation of the South Bank Coke Ovens, which employs 150 people, will cease first before production stops.

Labour MP for Middlesbrough South and East Cleveland, Tom Blenkinsop, said: "I know unions will be working closely with those workers to offer all the support they can but my heart goes out to those workers and their families."

The Redcar Coke Ovens and the Power Station will continue to operate but at a reduced level.

Chief operating officer Cornelius Louwrens, said: "We are deeply aware of the concern it will give to our employees and their families.

"Our parent company and other stakeholders have given great support to the business, and the decision to pause our iron and steel production has been taken reluctantly and in a scenario where no other practical options are available at present.

Image copyright PA
Image caption The former Tata site in Redcar was mothballed for two years before the blast furnace was relit

"Discussions will be held as soon as possible with our trade unions and employee representatives to clarify the effect the production pause will have on our employees."

Roy Rickhuss, general secretary of steelworkers' union Community said: "This is devastating news. Our first thoughts are with the workers who will be affected by today's announcement.

"We will be seeking urgent talks with SSI management to find out the full extent of the impact this will have on both SSI employees and contractors.

"In the coming days we will do all we can to support our members."

MP for Stockton South and Northern Powerhouse Minister, James Wharton, said: "It's not necessarily the end of the story for steel on Teesside...but it's clearly a difficult time."

'Tough time'

He added: "There's no denying it's significant and it's not good news. We have to make sure the impact is minimised and we do everything we can to try to mitigate what the knock-on effect could be on the economy on Teesside and in the UK."

Last month the company warned the plant's future was at risk, citing a slump in demand for steel in China and Russia for its problems.

Mr Louwrens said the price paid for slab steel had plummeted from $500 (£318) a tonne to below $300 (£191) over the past year.

Business Minister Anna Soubry, said: "This is disappointing news. The government stands ready to assist workers where needed.

"The steel industry is going through a tough time. The price of steel has plummeted as worldwide production rises and sales fail to pick up.

"Government can't fix the price of steel but we are doing what we can to help."

Gareth Stace, director of UK Steel, said the time for "warm words" from the government had passed and its promise to "hold a crisis summit" about the industry "cannot happen soon enough".

He said the government needed to act decisively otherwise "the damage to one of the most important industries underpinning our entire manufacturing industry will be irreversible".

At full capacity the Redcar plant produces up to 400 slabs of steel a day, each weighing up to 33 tonnes.

About £1bn has been invested in reopening the blast furnace.

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