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Steel cuts 'will have no effect'

MATERIALS Reduction in European production by 800,000 tonnes will not hit supply, claim steelwork specialists

STEELWORK specialists are confident that the construction industry is unlikely to be affected by supply squeezes despite recent cuts in European steel production.

Steelmaker Corus said last week it would lose close to a million tonnes of steel from its output while one of its furnaces is refurbished.

It revealed that as much as 800,000 tonnes of steel would be lost during the second half of the year because of a relining operation on the number 7 blast furnace at its production site in IJmuiden, Netherlands.

Work on the furnace will begin this month and is scheduled to be completed by November.

Corus expects the shutdown to hit income in the second half of the year by as much as £40 million, despite the price increases it announced last month that are set to be introduced in October.

These price hikes will see the basic cost of structural steel approach £1,000 per tonne by the end of the year.

The IJmuiden plant produces hot and cold rolled steel strip, normally used for car bodies and fridges, but some feared the loss of capacity could have a domino effect on structural steel production plants, leading to supply squeezes.

But Richard Barrett, the deputy president of the British Constructional Steelwork Association, dismissed such fears.

He said: 'I really do not think the closure will affect the UK construction industry. IJmuiden produces mostly strip products, so losing 800,000 tonnes of capacity should not impact us here.

Steel supply is quite tight but overall I do not think there will be any impact.'

Corus's railway service centre in Scunthorpe has landed a £23 million deal to weld track sections for railway infrastructure provider Network Rail.

The six-year deal will see as much as 600,000 tonnes of high-quality new rail being welded at the depot each year.

The rail will be transported to sites on specially adapted trains.

Network Rail deputy chief executive Iain Coucher said: 'The award of these contracts will play an important part in delivering a more reliable rail network.'