Corus idles UK slab plant, blaming global over-capacity
Corus is blaming global over-capacity for its decision to mothball the Teesside Cast Products slab plant in the UK at a cost of £80m (€88m).
The Redcar blast furnace, which has a capacity of 3.5m tonnes/year, Lackenby steelmaking and South Bank coke ovens will all be ramped-down over the next 6-8 weeks in the hope they can be restarted once the global slab market recovers. Mothballing will result in the loss of 1,700 jobs, Corus tells Steel Business Briefing.
TCP has been under threat since May when a consortium of buyers prematurely terminated a supply agreement, leaving the plant with no market for 80% of its slab output. The plant represents around 15% of Corus’ European capacity.
Clearly for TCP to continue operating, “sufficient slab demand and a strategic partner,” would be required, according to Corus ceo Kirby Adams. If TCP were to produce next year amid the currently weak slab market, it would do so at a loss, making the business “unsustainable,” he adds.
“If you look generally at the economic situation ... we have seen dramatic declines in demand for steel products,” he says. There is around 300mt of excess capacity in the global steel markets, Adams adds.
The Teesside beam mill will be unaffected by the move, with the majority of its slab sourced from within Corus. Earlier this year slab from the company’s IJmuiden plant in the Netherlands was being imported to feed the mill.
Corus is blaming global over-capacity for its decision to mothball the Teesside Cast Products slab plant in the UK at a cost of £80m (€88m).
The Redcar blast furnace, which has a capacity of 3.5m tonnes/year, Lackenby steelmaking and South Bank coke ovens will all be ramped-down over the next 6-8 weeks in the hope they can be restarted once the global slab market recovers. Mothballing will result in the loss of 1,700 jobs, Corus tells Steel Business Briefing.
TCP has been under threat since May when a consortium of buyers prematurely terminated a supply agreement, leaving the plant with no market for 80% of its slab output. The plant represents around 15% of Corus’ European capacity.
Clearly for TCP to continue operating, “sufficient slab demand and a strategic partner,” would be required, according to Corus ceo Kirby Adams. If TCP were to produce next year amid the currently weak slab market, it would do so at a loss, making the business “unsustainable,” he adds.
“If you look generally at the economic situation ... we have seen dramatic declines in demand for steel products,” he says. There is around 300mt of excess capacity in the global steel markets, Adams adds.
The Teesside beam mill will be unaffected by the move, with the majority of its slab sourced from within Corus. Earlier this year slab from the company’s IJmuiden plant in the Netherlands was being imported to feed the mill.
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