MANUFACTURERS in the region last night expressed their concerns as two companies became the latest casualties of rising steel prices.

Administrators have been called in to Lionweld Ken-nedy, on Teesside, where it was revealed last night that more than 200 jobs were at risk.

News of the company's problems came only 24 hours after Pressworks Metals, based in County Durham, also went into administration.

Both companies have cited the huge rise in the cost of steel as one of the major factors leading to their financial difficulties.

Lionweld Kennedy, which employs 231 people at factories in Middlesbrough and Hartlepool, said it was unable to pass on rising steel costs because of fixed-price contracts.

Alan Hall, northern director of the Engineering Employers Federation (EEF), said that, despite healthy order books and strong output, manufacturers in the region were in a precarious position.

He said: "Manufacturers are operating to very tight margins because of the increasing cost of steel and because very often they cannot pass that cost on.

"Something has to give, and unfortunately, as we are seeing here, it is the businesses themselves."

Pressworks Metals, which employs about 250 staff at its plant in Newton Aycliffe, near Darlington, appointed administrators last Friday after it got into financial difficulties.

The administrators for the company, Grant Thornton, said yesterday that steel costs had been an overwhelming factor in the company's problems.

A spokesman for the accountants, which is based in Newcastle, said: "The increases are unprecedented and it is very hard for companies to live with that if they cannot pass those costs on to the customer."

The spokesman said administrators were still in negotiations with customers and suppliers in the hope of finding a buyer.

The company makes pressings and mouldings for the car industry.

Accountants Ernst and Young, administrators for Lionweld, said last night that job losses at the manufacturer were inevitable.

A spokeswoman said: "We are optimistic of finding a buyer because this is a successful company with a healthy order book. However, in these circumstances, it is inevitable some jobs will go."

Lionweld, which makes industrial flooring, handrails and crash barriers and parapets, also suffered substantial losses on a recent bridge project in Northern Ireland.