STEELmaker Corus reported a fall in profits yesterday after a decline in steel prices and higher energy costs.

The Anglo-Dutch group, which employs nearly 3,000 people in the North-East, announced that operating profits fell in the three months to the end of March from £218m last year, to £176m.

But it said the outlook was positive, with steel selling prices rising by between five and seven per cent this quarter, and between seven and 12 per cent in the third quarter as worldwide demand picked up, particularly in China, North America and Europe.

Corus chief executive Philippe Varin said: "Corus is well-positioned to take advantage of the recovery in demand and spot prices."

Corus said market conditions stabilised in the first three months of the year after lower demand sent operating profits down to £83m in the final quarter of last year.

Despite the stabilisation, selling prices remained unchanged between January and March and energy prices increased costs by £20m.