Warning over future of SSI Redcar steel plant

The former Corus and Tata Steel plant was mothballed in 2010

The boss of a Teesside steel plant employing more than 1,000 people has said its future is at risk because of plummeting world prices.

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

But chief operating officer Cornelius Louwrens has warned that losses due to falling worldwide demand for the slab steel it produces cannot be sustained.

The company has invested about £1bn in reopening the Teesside blast furnace.

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

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

'Focus on jobs'

He declined to put a figure on the plant's losses, but described them as "significant and substantial".

He said the long-term future of the Redcar site was in doubt, adding: "You cannot make this size of losses continuously, without, at some point, saying this cannot work any longer.

"What I cannot say is how long we have for the market to turn around. But my message to everyone is to focus on their jobs, do them as good as possible, because this is what we can control."

Mr Louwrens blamed a slump in demand for steel in China and Russia for the company's problems.

He added: "Throughout our rebirth, since SSI bought this, all the evidence is that the parent company in Thailand have been willing to invest.

"But this is really tough on them at the moment and they are continuing to stick with us and we can only hope and trust that will continue."