Redcar MP Anna Turley has called on the Government to step in after news that production at the SSI steel plant near Redcar will be “paused”.
The ongoing crisis means that the livelihoods of thousands of Teessiders are under threat, as the plant employs 2,000 directly, with many more involved through the local supply chain.
SSI, who took over the former Tata Steel complex after it was mothballed in 2010, confirmed on Friday that preparations were under way to cut production during the day, citing ongoing issues with the supply of raw materials and services.
Operation of the South Bank Coke Ovens, which employ 150 people, will cease first before being mothballed.
The Redcar Coke Ovens and the Power Station will continue to operate but at a reduced level.
Turley said: “At this stage, the blast furnace is not being mothballed and will remain lit. We have to keep fighting to keep the plant open. It is too important to UK industry and to our community to fail. The Government must step in.”
About £1bn has been invested in reopening the blast furnace.
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.
“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.”
SSI had recently warned that the company’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 a tonne to below $300 over the past 12 months.
Stockton South MP James Wharton, the Northern Powerhouse Minister, said: “It’s not necessarily the end of the story for steel on Teesside but it’s clearly a difficult time.
“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.”
Tom Blenkinsop, Labour MP for Middlesbrough South and East Cleveland added: “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.”
Redcar and Cleveland Council leader, Cllr Sue Jeffrey, also issued a statement today.
“This news is a real blow to our communities and my thoughts are with everyone affected by today’s announcement,” said Cllr Jeffrey.
“We have fought long and hard to get steel production up and running again, since it was mothballed in 2010. And we recognise how important this is to our local economy, and the impact on the prosperity and the wellbeing of our people.
“I’m disappointed that the global market situation has led to SSI’s decision to close the South Bank coke ovens and pause production, particularly as we have all worked so hard in recent years to support and nurture the business.
“We will do everything we can as a council to work with SSI to try and ensure that steelmaking is sustained into the future.
“But National Government must take the lead to support the steel industry both here in the Tees Valley and across the UK. We need to see the rhetoric of the Northern Powerhouse turned into action. This is the first real test of this key government policy and they need to show that they can deliver.”
At full capacity the Redcar plant produces up to 400 slabs of steel a day, each weighing up to 33 tonnes.