STEEL and union bosses are battling to keep the region's last surviving iron and steelworks in business amid a crisis that threatens the industry globally.

As SSI at Redcar approaches the third anniversary since production was restarted at the former Corus works, Cornelius Louwrens, chief operations officer, admitted it is still struggling to make a profit.

In a message to workers published in the staff magazine, Mr Louwrens warned of the challenges posed by a "traumatic fall" in steel prices which is expected to keep the Thai-owned business in the red for the foreseeable future.

The terms of a new pay and bonus deal, which SSI has agreed with trade unions, has been put on hold until the business is in a position to afford to make the payments, Mr Louwrens explained.

Cheap imports from China, which has been shipping huge amounts of steel out of the country since its breakneck economic growth slowed over the last two years, have been a major factor in depressing global prices.

Producers in the US are so concerned by the threat from China they recently held talks with Congress and used words such as "gruesome," and "dire" to describe conditions that have led to the closure and mothballing of American steel mills, as well as jobs losses and pay cuts of up to 40 per cent.

Imports now account for a record share of the US steel market, prompting Mario Longhi, the chief of US Steel Corp, to warn senators that the last time import rates were this high nearly half of American steel companies went bust.

SSI's Redcar plant continues to stay afloat thanks to the support of its financial backers in Bangkok, China and Europe.

Mr Louwrens hopes that steel prices have now bottomed out and that the SSI UK operations will start to see some improvements in the next three months.

There could be a glimmer of hope for Europe and the US as Chinese mills are producing vast quantities at such low prices many are teetering on the verge of financial collapse, industry experts have said.

In addition to the impact from China, which now makes more more than half of the world’s steel, Mr Louwrens pointed to the currency devaluation in Russia, which has enabled its producers to weather the crisis, and to the ongoing problems in the oil industry, which has caused developers to cancel projects, with the knock-on effect of reducing demand for steel.

In the meantime, SSI is focussing on things that it can influence, such as improving safety performance, maximising outputs, and minimising the cost base.

"I am looking for your continued support, so that we come out of this difficult period in good shape and in a position to take advantage of the improved market conditions when they return," Mr Louwrens told staff.

Since the mothballed plant fired up its blast furnace on April 15, 2012, more than eight million tonnes of Teesside steel has left the plant for clients in Thailand, Europe and the US.

Almost 2,000 people are employed at the works, which supports hundreds of jobs in the regional supply chain.

Teesport operator PD Ports recently demonstrated its confidence in the business when it signed a new seven year deal to handle SSI's steel slab shipments.