Sahaviriya Steel Industries relights Redcar blast furnace
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Europe’s second-largest blast furnace was relit on Sunday afternoon by Sahaviriya Steel Industries (SSI) of Thailand, 26 months after it was mothballed by Tata Steel.
In February 2011 Tata Steel UK sold certain assets of Teesside Cast Products to SSI in a deal worth $469m (£290m).
Since then, SSI is said to have invested an additional $1.1bn for start-up and investment costs.
It is expected that the first iron suitable for conversion into steel will be produced within the next two to three days.
From next month, the steel produced at Redcar will almost exclusively be exported to Thailand. The plant is expected to have an annual capacity of 3.6 million tonnes and by the end of 2012 the facility will export to Asia. The workforce is expected to rise from 1,700 to 1,800 when production peaks.
George Dunning, Redcar council leader and campaigner for the return of steelmaking to the area, said: ‘It’s extremely important because at Redcar and Cleveland Council we’ve lost 500 public-sector jobs over the last two years due to the coalition government’s cuts.
‘To have another 100 well-paid steelworker jobs coming to the area is great. For the local economy of Redcar and Cleveland it’s a major boost.’
Steelmaking is the bedrock of a north-east heavy industry that dates back to the 1850s. The blast furnace, now heating up to 1,200°C, will be used to produce the site’s first steel slab in more than two years.
Unite national officer Paul Reuter said: ’This is great news for our members, the community and UK manufacturing. This is a testament and a great reflection of the skills of UK workers. These dedicated workers thoroughly deserve this and the long-term security of employment this brings for them.’
Meanwhile, Michael Leahy, general secretary of union Community said: ‘This is a great day for Teeside and a tribute to all those who campaigned in the local community and nationally to Save our Steel. We will be working closely with the company to ensure a successful future for all.’
‘It has been two years since steel was produced at the Redcar plant, but the determination of a community, the foresight of a foreign company, the partnership of both the public and private sector and the outstanding reputation of a workforce has ensured its return,‘ added James Ramsbotham, chief executive of North East Chamber of Commerce.
Sahaviriya Steel Teesside is a Tier 1 World steel slab producer capable of producing various advanced steel grades. The site is integrated with a deep-water berth and ore terminal for easy access to imported raw materials.
Readers' comments (10)
Anonymous | 16 Apr 2012 5:46 pm
Fantastic news, I feel so chuffed for the workforce, its a great turnaround for all concerned and just goes to show what can be acheived by remaining positive even in the face of adversity.
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Galathumpian | 16 Apr 2012 7:13 pm
This plant can not produce slabs at competitve prices, and the investment costs will not be recovered. Other factors will determine whether the plant survives or goes under.
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Tony Walker | 17 Apr 2012 3:08 pm
Galathumpian
Why do you suggest SSI have invested in the plant and start up?
They must have some confidence that we do not seem to be able to generate!
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Galathumpian | 17 Apr 2012 7:19 pm
Their confidence may be based on naivety. They have no in-house experience of steelmaking via this process route.
The finacial charges alone resulting from this investment will be of the order of $150/tonne. The World is awash with steel slabs which are available at prices much lower than can be produced by the teesside works.
Slabs on the open market are being sold by companies whose capital investment has been sunk or written off, and by countries like China and the former Soviet Republics where profit is not important.
The competitors of SSI in Thailand or elsewhere in South East Asia will be able to buy slabs much cheaper than those from Redcar. So unless Thailand is prepared to put up the shutters and impose strict import tariffs, SSI will not be able to compete.
The location of merchant slab production facilities in the UK is not very smart. There are only 2 such plants dedicated to merchant slab production in the World; one in Brazil, and the other in Mexico. Others enter the market at times when their mills are down, and they "dump" their steel semis on the market to avoid shutting down their iron and steelmaking plants.
SSI have long had a vision of being able to produce their own slabs, and they had a project to do just this when the financial crisis in the Far East in the late 1990's caused them to abandon their plans.
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Galathumpian | 17 Apr 2012 9:39 pm
I should have added that it is not a matter of "confidence". It is a matter of basic cost structure. There is nothing magical about making steel.
The death knell was sounded for the Redcar works when the former owners, Corus, in their wisdom, decided to introduce separate in-works cost centres by forming separate businesses within each works, on the rather naive belief that an internal market would be created, each competing with each other.
In this way, so they thought, iron and steel making at say Redcar would compete with Scunthorpe and South Wales. The whole concept of integration of the steel making with subsequent rolling was ignored, along with the modern steel casting methods known as "near-shape" casting, together with "hot-connecting" the mills with the steel making plant.
This philosophy was, and could only have been dreamed up by, individuals with a financial background. I can assure you they were not professional engineers.
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gerald | 20 Apr 2012 0:49 am
... cost are really only a secondary after thought, this is about pride and the abillity too grow from the experience,.. once the U.K. determines that it's in they'r best interest to lower export tariffs, the working enviroment will change, this is a long tearm project, and not haveing too be dependent upon out side entities has an advantage that money can't buy,..
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Galathumpian | 20 Apr 2012 8:46 pm
The opportunity to continue to produce iron and steel from local (British) raw materials was lost when the steel works in Corby was closed, together with the coal mines with reserves of good quality coking coal, principally in Kent. These decisions were taken based on the financial prices of imported ores and coals. If economic values had been considered, Corby and the associated mines would still be open.
The decision to import all coking coal was taken because because the financial prices of coal mined in the UK were higher than imported coal from Australia. At the time, the price evaluation indicated that the freight costs of coal from Kent to Teesside were higher than the imported coal from Australia, which was true, even considering that the imported coal had been carried by rail over 400 miles in Australia to the loading port, and then shipped half way around the World. This demonstrates the folly of using financial prices rather than economically evaluated ones, which seem to have gone out of favour.
Little consideration was given to the importance of steel as a National strategic material, or to the effects on jobs.
Redcar uses only imported ores and coals.
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Garter Blue | 21 Oct 2012 4:27 pm
Very interesting arguments. I worked at the integrated plant Corby when it was a going concern and have not been impressed by national strategies then or or since.
The notion of importing raw materials (presumably not the limestone) to make semi-finished slabs for export alone says much, if I read that correctly.
I have yet to discover the kind of steel-making at this site. Can you say, please?
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Garter Blue | 21 Oct 2012 4:27 pm
Very interesting arguments. I worked at the integrated plant Corby when it was a going concern and have not been impressed by national strategies then or or since.
The notion of importing raw materials (presumably not the limestone) to make semi-finished slabs for export alone says much, if I read that correctly.
I have yet to discover the kind of steel-making at this site. Can you say, please?
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Galathumpian | 21 Dec 2012 9:41 am
The slabs produced are those required for the hot rolling strip mill in Thailand for the flat products market; cars, washing machines, etc. They are not for the long products range, such as rebars, wire drawing, sections, etc.
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