Global steel uplift is key for Teesside

Jan 13 2010 by Sue Scott, Evening Gazette

STRENGTHENING world demand for steel as every economy apart from Britain appears to dig itself out of the economic crisis, is at the heart of Corus decision to reverse plans to close one of the most vulnerable parts of the TCP plant at Redcar.

MD Jon Bolton said coke prices had strengthened by a surprising 20% over four weeks, giving the steelmaker - which previously said it would only preserve the larger, 1.2m tonne Redcar coke ovens when TCP was mothballed - reason to be cautiously cheerful, since it can sell the product on a world market, hungry to fuel blast furnaces.

Meanwhile, Redcar continued to produce 160,000t of slab this month to stockpile for Corus internal orders while its other UK plants prepare to take up the slack created by removing the 3m tonne plant from the market.

“The extra world demand for coke is connected to steel and people brining more capacity on line,” said Mr Bolton.

“ The world price is generally affected by Chinese coke and that’s where the surplus is, but they have a 40% export tariff to keep it in the country.

Changing commercial conditions, which have seen steel prices across almost all categories strengthen since the end of last year, have coincided with political pressure at home to hammer out any solution other than closure for TCP.

The nuclear option to mothball the plant - seen by many to be the nail in the coffin for slab steel making on Teesside, although theoretically, it could be revived - would see the loss of around 1,600 direct jobs and thousands more contractors permanently employed on the plant.

The economic impact on the wider supply chain and local community would run into hundreds of millions with the spectre of long-term unemployment haunting government.

Lifting the axe on the South Bank coke ovens - where up to 150 people are employed in one of the grimiest, toughest areas of the works, turning out 700,000t of coke a year - is a significant step for the steelmaker, backed as it is by a three-year business plan.