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The stricken SSI steel plant at Redcar is to be mothballed, its Thai owners announced today.

The devastating news comes as a major blow to thousands of workers who have been left in limbo for more than a week after calls for clarity were met with “a wall of silence” from the steel maker.

SSI announced earlier this month it was halting production of iron and steelmaking at its Redcar blast furnace, as well as the mothballing of one of its coke ovens, raising fears about the future of steelmaking in the area.

As a further consequence of the mothballing, it is proposed to reduce by around 1,700 employees - including those affected by the mothballing of the South Bank Coke Ovens which was announced previously.

Today the beleaguered firm delivered the crushing news to workers, who will now enter a 45-day consultation period over redundancies.

It said the decision was taken against a "continuing background of poor steel trading conditions" and a severe deterioration in steel prices in 2015. The firm said it believed this was "unlikely to change in the short term".

Cornelius Louwrens, UK business director and chief operating officer, said: “This is an extremely sad day for all of us at SSI UK, and in particular our employees and their families.

(Image: The Gazette)

Live: Reaction to announcement that SSI is to be mothballed

"Together with our parent company and the various other stakeholders, they have worked so hard in their endeavours to try and make this business successful.

"Despite the significant progress we made in the financial performance of the business during 2014, market conditions this year have been extremely challenging and unfortunately this has led to the decision we are announcing today.

"I would like to pay tribute to and thank everyone connected with SSI UK for their great support.

"My wish is that this facility can once again restart operations and fulfil the potential of the plant and its loyal workforce”

The firm said it would continue to work with various stakeholders, including Government with the objective of restarting operations at Teesside at some point in the future.

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SSI crisis in numbers: How much is owed, to who and what happens next?

Steel workers were given a lift on Friday when they were paid after the Government stepped in to ensure the £5m wage bill was settled.

But the latest announcement will leave them wondering if it will be for the last time.

About 2,000 people work for SSI at the Redcar plant - the country’s second-biggest steelmaker - although 150 are already in a redundancy process after a decision to mothball the South Bank coke ovens.

A further 1,000 contractors also depend on SSI for work.

The importance of the Redcar plant to Teesside has been highlighted by a campaign to keep the site operating.

At least 2,000 people joined an emotional rally “Save our Steel” rally held Redcar on Thursday night.

Thousands of Boro fans also took part in a show of unity at the team’s clash with at the Riverside yesterday, while players also showed their support by wearing “Save Our Steel” t-shirts.

Pleas have been made for the Government to intervene, but ministers have said they are restricted in what help can be provided due to European state aid rules.

Northern Powerhouse Minister and Stockton South MP Conservative James Wharton, said: “This is obviously very bad news but has been on the cards and sadly won’t come as a surprise to many.

“Hopefully if the global market improves the owners will look at reopening, but for the time being we need to focus on what we can do to support those directly affected, Teesside survived the loss of steel in 2009 and saw it return in 2012, we know from experience that things can change.

“A Government-backed local task force will look at what support can be given and co-ordinate the effort to deliver it.

“There are lots of positive things happening on Teesside, this is a harsh blow but we cannot allow it to knock us off course as our economy improves.”

Roy Rickhuss, general secretary of the Community union, said last week that the “wall of silence from SSI” was “causing deep distress among our members and their families and the entire community that depends on Teesside steel”.

Angela Eagle, shadow business secretary, added last week that the steel industry was “of vital strategic importance to the UK economy".

She added: “As a matter of urgency, SSI must make it clear to the Government what support they require, and in turn the Government must keep to its promise of doing everything possible to keep steel-making on Teesside, in the first instance by protecting key assets.”

About 1,700 jobs were lost when the plant’s then-owners, Indian firm Tata Steel, closed the works in 2010.

But two years later the furnace, the second largest in Europe, was re-lit and steel production started again under Thai-based Sahaviriya Steel Industries (SSI).