A REPORT published today which claims steel production increased by almost a quarter in the UK last year was last night welcomed by a North- East council leader.

George Dunning, leader of Redcar and Cleveland Borough Council, said the news was a boost to plans to reopen the mothballed steelworks in Redcar.

The report, by UK Steel, states that production across the country is up by almost a quarter, with 9.4 million tonnes of output last year compared with 7.5 million tonnes the previous year.

Councillor Dunning believes the figures will give Thai firm Sahaviriya Steel Industries (SSI) an extra boost with its plans to complete the £320m purchase of Tata Steel’s plant in Redcar, within the next two months.

“Any increase in steel production can only be a good thing for the blast furnace,”

said Coun Dunning.

“Obviously it will be absolutely fantastic if SSI can expand and bring some of our other plants back.”

However, Geoff Waterfield, chairman of the Teesside multi-union workers’ committee, said the figures related to selling to the UK and Europe not the Asian market, which SSI would be dealing with.

“The volume of steel is not going up as much as some people would like and we are always scared of a double dip recession,” he said.

“However, the Asian market is strong and there appears to be a need for steel.”

Once any acquisition of the plant is completed by SSI, it is expected to be operational again within about six months. The company then hopes to expand within two years.

Coun Dunning said: “I said when the blast furnace was turned off it was a real tragedy. Thankfully, someone like SSI, who could see the potential, came along.

“It was a terrible mistake to go-ahead and close it down. It was done far too quickly.”

Ian Rodgers, director of UK Steel, a division of the Engineering Employers Federation, said: “The strong improvement in steel output last year was encouraging and reflects the pick-up in manufacturing activity in the UK and in our principal European export markets.

“Nevertheless, production remained well below prerecession levels.

“The disappointing end to the year was largely due to steel supply chains running down stock levels in advance of the year-end.

“As a consequence, many steel companies introduced extended shutdowns and maintenance closures during the Christmas period.”

Mr Rodgers said the year had started positively, and he was hopeful that steel output levels will recover this month.