A STEEL maker says it continues to battle against a tough market, despite hailing increased production levels.

Tata Steel, which employs about 1,500 North-East workers, says its European division made its largest volume of liquid steel for more than five years on a like-for-like basis in the third quarter.

Bosses say it made 3.91 million tonnes in the period to December 31, 19 per cent higher than last year's 3.29 million tonnes.

The results come just days after Tim Morris, Tata Steel's European head of public affairs, told The Northern Echo the industry will remain challenging, with the company admitting demand still languishes at historically low levels.

Last night, the Community trade union, which represents UK steel workers, also raised worries over the wider industry's ongoing performance, calling on the Government to change its stance on energy and environmental policies to help UK-based companies compete against European rivals.

Dr Karl-Ulrich Koehler, Tata Steel's European managing director and chief executive, said: “The asset base we restored and upgraded last year has been running at stable rates, which has led to the continued year-on-year turnaround in financial performance.

“With European economic indicators improving, these efforts will better enable us to benefit from any growth in European steel demand, which remains at historically low levels.”

Tata, which is the UK's largest steel producer and the world's 12th largest, has factories across the region including its Teesside beam mill, in Redcar, which rolls and finishes construction steel sections, and the Hartlepool pipe mill, capable of supplying steel for energy projects.

According to its results, Tata's deliveries increased to 9.79 million tonnes in the quarter, compared to 9.65 million tonnes a year ago, with new orders from a car maker and rail operators boosting its position.

It has been helped by a partnership with Sunderland-based Nissan, which is using steel to build its new Qashqai model and all-electric models.

It is also supplying more than 200,000 tonnes of track to French rail operator SNCF from its Northern France plant and about 140,000 tonnes of rail every year to Network Rail from Scunthorpe.

However, Roy Rickhuss, Community union general secretary, said Tata still needed more support from the Government.

He said: “The performance is testament to the commitment of its employees, but there are clear challenges remaining in the context of low levels of demand in Europe.

“Tata is not only constrained by a difficult market, but also by the Government's energy and environmental policies, where it is at a competitive disadvantage when compared to steel producers in France or Germany.

“When you consider electricity prices for UK steel producers are about 40 per cent higher than those in France and 56 per cent higher than those in Germany, it's clear more needs to be done.

“If the Government is serious about re-balancing the economy, then steel and other foundation industries deserve more support, and it should use the Budget to demonstrate that commitment.”