I AM accustomed to being spun a line, so when steel union boss Paul Warren told me on Sunday morning that despite huge losses the future of Redcar steelworks looked bright my instinct was to think – ‘I hope you are right.’

The latest annual results from SSI UK showed it was £194m in the red. That was almost £100m better than the previous year’s deficit, so things are heading in the right direction, but are they heading there quickly enough?

Since the blast furnace was relit two-and-a-half years ago SSI UK has been running at a loss. Its accountants were so concerned by the losses they used the latest set of results to question the firm’s ability to continue as a going concern.

This is serious stuff, but it’s also the kind of caution that you might expect from responsible auditors. Their fears were based on the company’s exposure to risk. If steel prices continued to fall then profitability would look even more unlikely. Furthermore, the plant relies on hand-outs from its Thai owners and a syndicate of banks to continue trading. Cashflow has been a constant problem. It has deferred repayments to suppliers and the local council. Without cash from Win Viriyaprapaikit, the SSI group president, and his backers, the story of 160-odd years of steel-making on Teesside would be over.

With all that in mind was the union boss being blindly optimistic to think that happier times are just around the corners for the plant?

Yes, and no.

Steel prices are highly volatile. This is a fiercely competitive market where SSI is a tiny player attempting to carve out a niche.

It might be one of our region’s biggest employers, with 1794 workers, but compared to say ArcelorMittal, which has more than 200,000 on the payroll, it’s a minnow.

How can a loss-making business on Teesside hope to compete?

The Redcar firm has a number of key factors in its favour.

First, its parent company in Bangkok is also one of its key customers. Unlike many of its rivals this guarantees the Teesside plant a ready market for its product. To ensure it is not wholly reliant on the South East Asian market over the last year SSI UK has struck deals with new clients, notably in Germany and the US.

New plant boss Cornelius Louwrens has led an efficiency drive to reduce costs, and productivity is on the rise.

But the main source of optimism comes from the fact that the gloomy annual report reflected on a very tough spell for SSI UK. Bosses and unions insist the company is now through the worst.

Over the summer the firm began to show operating profit. The amount was undisclosed - I’m told it was a very modest sum - but it was a sign that the business was finally getting the numbers right. The next quarterly results should also be positive.

There is a hell of a long way to go. The Northern Echo has backed the steelworks since it was mothballed by former owner Corus, and we will continue to be as positive as possible.

Teesside steel-making has been a story of defying the odds. It's come too far to fail now.