Britain's second-biggest steelmaker SSI UK has announced plans to mothball a plant in northeast England and axe about 1,700 jobs. As Laura Frykberg reports the loss-making company, a unit of Thailand's biggest steelmaker Sahaviriya Steel Industries (SSI), has been hit by a slump in steel prices this year.
After more than 100 years of steel-making, the Redcar plant in northeast England is axing almost all of its staff. A sign that production of the metal is increasingly becoming a sunset industry in the UK. Cornelius Louwrens is COO at Sahaviriya Steel Industries. (SOUNDBITE) (English) CORNELIUS LOUWRENS, CHIEF OPERATING OFFICER, SSI UK SAYING: "The world of steel is still getting worse, so you then have to look forward and say is there any prospect of bringing this plant back in the short term? And the decision from the board is not." In total 1700 jobs will go - that's 10 percent of the entire steel workforce in Britain. (SOUNDBITE) (English) LOCAL RESIDENT SAYING: "It's one of the biggest, if not the biggest employer in the area, 1000 men plus 1000 contractors, who's helping us out??" The Thai company which owns the plant says it's losing money. Caused by a slump in steel prices - and over-production in China. Investec's Jeremy Wrathall says their recent currency devaluation hasn't helped (SOUNDBITE) (English) JEREMY WRATHALL, ANALYST, INVESTEC BANK SAYING: "Their currency is now depreciating, which makes their steel cheaper, "Their only way out of their crisis internally is to export that steel - some would say dump it - some would say export it to the west, so I honestly do not see any hope of steel prices going up in the near future." It's not the first time the plant has run into trouble. Five years ago it was mothballed during the heart of the financial crisis - but the current owners stepped in to rescue it after protests by workers. This time there's lots of community support, but so far it's fallen on deaf ears.