Tata Steel temporarily defers hot strip mill in UK on weak demand

Tata Steel will temporarily defer one of its British hot
strip mills with immediate effect, as a result of weak steel demand in Britain
and the bleak economic outlook for Europe.

The mill at Tata Steel's Llanwern site in Newport, South
Wales, would remain mothballed until there will be any improvement in the
British economy and steel demand, the company said on Friday.

Last month, Tata Steel announced it would be closing its
Construction Products division, also at Llanwern, as a result of a sharp fall
in British construction activity.

Meanwhile, the market would be supplied with hot strip mill
from Tata Steel's Port Talbot site, where costs were lower, the company said.
The other divisions at Llanwern – a cold rolling mill and a Zodiac galvanising
line – would continue to operate as usual.

“The Llanwern hot rolling mill is an important operation for
us, and our intention is to bring it back into operation as soon as market
conditions permit,” said Mr Jon Ferriman, Tata Steel's hub director for Strip
Products at Llanwern and Port Talbot. “We remain committed to sustainable
steelmaking in Wales. At the same time we are placing a strong emphasis on cost-saving
measures as we weather the current economic downturn.”