About 3,000 jobs at Tata-owned Corus’ Teesside plant are in jeopardy as a consortium of four global companies, the plant’s single largest client has abandoned an agreement with the company to buy products.
The consortium was buying four-fifths of the steel the plant produced.
Corus said it has found orders to keep the plant open until September but could not rule out the possibility that it will be mothballed before the end of the year.
Corus chief executive Kirby Adams said: “We feel great sympathy with our employees and the Redcar community because of the continuing anxiety they are experiencing about their future due to the consortium’s termination of the offtake agreement without notice.
“We have kept the plant going for 100 days without any external business and continue to do everything in our power to keep Teesside Cast Products (TCP) in operation despite the consortium’s breach of contract and the economic downturn.”
Corus is particularly dismayed because the contract with the consortium meant it sold the steel at cost, allowing the four firms to take advantage of a higher market price.
For the last four years they have profited from the contract on the back of booming demand from China. But, now that steel prices have tumbled, they have ditched it for being potentially loss-making, the company said.