Sahaviriya Steel Industries Plc (SSI) is suspending steel production at its UK plant in Teesside as it struggles with slumping prices for the metal.
Output at the plant, employing about 2,000 people, will be halted while the Thai company assesses the situation in discussion with the UK government and suppliers, SSI said in a statement on Friday.
"The problems within the global steel industry have been well-publicised in recent weeks and our decision follows a major deterioration in steel prices affecting our business during the course of this year," it said.
European steel mills face weak prices as economic growth in China, the top consumer, is forecast to weaken to the slowest since 1990. They are also battling a flood of cheap exports from China, producer of about half the world’s steel, as its own producers ship cheap metal overseas. As well, in the UK the pound's strength has made steelmakers less competitive.
SSI bought the plant in northeastern England from Tata Steel in 2011. Tata sold the plant after it started losing money in 2009, when buyers making up about 80% of its production reneged on contracts. The site includes coke ovens, power generation facilities and the Redcar Blast Furnace.