SSI United Kingdom to pause Teesside steelmaking operations

LONDON/BANGKOK, Sept 18 (Reuters) – Britain’s second-largest steelmaker, SSI United Kingdom , said on Friday it was halting operations at its Redcar plant in northeast England, calling into question the future of its business and putting 2,000 jobs at risk.

The coke ovens and power station on the site in Redcar will continue to operate at a reduced level, but production at the South Bank coke ovens will cease and the plant will be mothballed.

Pressure is mounting on the British government to take decisive and urgent action to support the domestic steel industry, in the wake of unprecedented pressure, which threatens jobs and the future of the industry.

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

“We need help and support from the government right now”.

MPs will debate the “crisis” in United Kingdom steel production this week as SSI’s current financial difficulties were highlighted in national reports.

Roy Rickhuss, general secretary of Community, which represents the majority of workers and contractors at SSI, added: “This is devastating news”.

“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”.

“I have been speaking to SSI, Community Union, and the Minister’s office today to see what steps can be taken”. “We need a clear indication from government that it will honour its commitment to compensate steel and other energy-intensive industries from the cripplingly high cost of energy”.

“In the coming days we will do all we can to support our members”. Next week I am in China and I will talk to Chinese officials.

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 hard time”. “If they don’t act decisively, then the damage to one of the most important industries underpinning our entire manufacturing sector will be irreversible”.

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

“It is an exceptionally worrying time for the workers”.

Producing steel profitably is hard in Britain due to cheap imports and a strong currency, plus relatively high energy costs and “green” taxes imposed on heavy industry that are some of the highest in the world. “The UK Government needs to follow the lead of their French, Italian and German counterparts and step up support for steelmaking here in the United Kingdom as part of a wider industrial strategy to rebalance the economy”.

And Anna Turley, the Labour MP for Redcar, has secured a three-hour debate about UKL steelmaking on Thursday and has repeated her call for government action on Teesside to tackle the “crisis”.

In the last two months, Tata Steel announced the mothballing of its strip products business in Llanwern in Wales, and warned that up to 720 jobs could go at its specialty and bar business division.