Steel producers Sahaviriya Steel Industries UK (SSI) is ending production at its iron and steel making facilities on Teesside with the loss of 1,700 jobs.
The company had said on 18 September that operations at its Redcar plant (above) would be “paused” due to “ongoing issues with the supply of raw materials and services”.
Now, after “a further evaluation and assessment of the situation facing the business”, it has concluded that they are faced with no other option but to ‘“mothball” the facility.
The 1,700 jobs lost as a consequence include those affected by the previously announced mothballing of the South Bank coke ovens. The Redcar coke ovens and the power station will continue to operate.
The firm said the decision came due to “poor steel trading conditions across the globe and the consequential severe deterioration in steel prices during the course of 2015”, which it believes are unlikely to change in the short term.
The firm’s chief operating officer, Cornelius Louwrens said: “This is an extremely sad day for all of us at SSI UK, and in particular our employees and their families. Together with our parent company and the various other stakeholders, they have worked so hard in their endeavours to try and make this business successful.
“Despite the significant progress we made in the financial performance of the business during 2014, market conditions this year have been extremely challenging and unfortunately this has led to the decision we are announcing today.
“I would like to pay tribute to and thank everyone connected with SSI UK for their great support. My wish is that this facility can once again restart operations and fulfil the potential of the plant and its loyal workforce.”
The firm said it would continue to work with various stakeholders, including the Government, with the objective of restarting operations at Teesside “at some point in the future”.
It added it will consult with trade unions and employee representatives as soon as possible.
Business minister Anna Soubry called it “a big blow for the workforce and their families”.
“I hope that SSI’s announcement that they are mothballing the furnace gives some hope that steel making could be restarted on Teesside in the future.
“The steel industry across the UK is facing very challenging economic conditions. The price of steel has almost halved over the past year, with overproduction in the world market. While government cannot alter these conditions, I have called a steel summit to see what more can be done to help our steel industry.”
The British Metal Recycling Association director general, Ian Hetherington said he was concerned by the closure, when the pause in production was announced, because it represented a shrinking marketplace.
“This means there are fewer opportunities for the UK to recycle its ferrous scrap metal instead of exporting the vast majority.”
The Labour party conference in Brighton held an emergency debate (pictured) on the announcement with former shadow minister Chuka Umunna tweeting that it was “a dark day for the UK’s steel industry”.
Thoughts are very much with the 1,700 employees at SSI’s Redcar plant. Terrible news and a dark day for the UK’s steel industry.
— Chuka Umunna (@ChukaUmunna) September 28, 2015