A SENIOR North-East steel boss has warned the sector remains tough, but says a partnership with a regional car maker is providing fresh optimism.
Tim Morris, Tata Steel's European head of public affairs, says the industry is slowly improving, though the challenging environment looks set to continue throughout the year.
His caution comes after the UK Steel trade association said demand across all steel makers remains weak, despite new figures showing overall average weekly production increased to 228,000 tonnes last year.
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However, Mr Morris told The Northern Echo some sectors were providing vigour, including the automotive industry, where Tata works with Sunderland-based Nissan.
The firm, which employs about 1,500 North-East workers, provides steel for the Japanese car maker, which production line staff use to build its all-electric Leaf and new Qashqai models.
Bosses say its stronger steel helps improve vehicle fuel economy.
Last year, Tata, which is the UK's largest steel producer and the world's 12th biggest steel maker, revealed its highest European production levels for five years.
Mr Morris said: “It has been a very challenging time and steel demand is about 30 per cent below where it was pre-recession.
“Some of the markets that are important to us, like infrastructure and construction of things such as office blocks and shopping centres, remain difficult.
“The recovery is coming from a low base.
“However, there are bright spots out there and the automotive sector is one of them.”
Tata's North-East factories include the Teesside beam mill, in Redcar, which rolls and finishes construction steel sections, Skinningrove, in east Cleveland, which provides steel for track shoes on earthmoving vehicles, and its Hartlepool pipe mill, capable of supplying steel for energy projects.
The company revealed plans in October last year to restructure its UK Long Products division, with 500 jobs at risk, including up to 40 North-East management positions and administration posts.
Bosses have yet to confirm any changes, but Mr Morris said its regional plants remained intrinsic to operations.
He said: “We employ 1,500 people in the North-East, who are a fantastic workforce.
“They, and our business in the region, is a big part of the company in terms of what we produce.
“Hartlepool can deliver world-class products for the oil and gas sector, which is an important area for us, and our beam mill in Teesside likewise provides high-quality steel for the construction market.”
Mr Morris also reiterated a call from Dr Karl-Ulrich Koehler, Tata Steel's European operations chairman, who said the Government must champion foundation industries.
Dr Koehler wants industries such as chemical, glass, metal and cement makers to receive fairer treatment, and has urged the appointment of a manufacturing minister to fight their cause against issues such as rising energy costs and a skills shortage.
Business Secretary, Dr Vince Cable, said any move would be a token gesture.
However, Mr Morris said: “If the Government wants to come back and say there is a better alternative, then we will work with them on that.
“The important thing are the foundation industries.
“This is not about bashing the Government, it is about highlighting how important this issue is.
“Indeed, Vince Cable came to the announcement of our report on this subject, so it is certainly something that captured his attention.”