THE fate of 2,200 Teesside steelworkers lies in the hands of a volatile exchange rate, according to one academic.

Corus's announcement yesterday that it was concentrating on making "flat products" in Port Talbot, Wales, and "long products" in Scunthorpe, left the company's other major centre out on a limb.

Its North-East works will soon not be producing metal for Corus and will be left at the mercy of the global market.

Many experts predict this could spell disaster for the region. Producers in China, Russia and the Ukraine produce large volumes of cheap, state-subsidised commodity steel.

Teesside, while being the most cost-efficient within Corus, cannot hope to compete purely on price, but will be hoping a combination of affordability and quality will win through.

Jonathan Aylen, senior lecturer at the University of Manchester Institute of Science and Technology, and an expert on the steel industry, said that a weakening of the pound versus the euro in recent months has played into the hands of Teesside.

"Corus is betting the future of Teesside on the continuing parity or weakness of sterling," he said:

"The situation is that for the time being, it does look possible. Were the pound to go back to its former strength they are in deep trouble."

He said: "There is a market out there, but it is a precarious position to be in. You are naked, you are exposed to a world commodity price for slabs and blooms."

It is precisely that exposure which is causing enormous concern.

John Wilson runs the University of Teesside business school. He said: "Essentially, Corus is saying to its workers at Redcar that it is up to them to make a success on their own.

"I do not see how the employees can do that which Corus has singularly failed to do."

One analyst said it was a challenge to Teesside to find its own future. "The market is there, it comes down to competitiveness," he said.

"They are certainly not the most efficient, but neither are they the worst.

"I fear they are not going to be able to compete with the Russians, Chinese and Ukranians.

"They may struggle because they are in the commodity end of the market rather than the high value."

Salvation may lie in the misfortune of others.

Germany, a major steel producer in its own right, is one country that is struggling in the jaws of recession.

Mr Aylen told The Northern Echo that Teesside could find succour with European allies.

"You could make slabs in Redcar, sail them across the Channel and up the Rhine to Thyssen Krupp Stahl more cheaply than they can produce it at the moment," he said.

It is a crumb of comfort that aspects of world economics are finally favouring the region's ailing steelmakers at a time when they most need them.