Page last updated at 16:15 GMT, Thursday, 10 September 2009 17:15 UK

Furnace to restart at steel plant

The Corus plant at Port Talbot
Corus said the furnace restart would give its business more flexibility

Steel giant Corus is to restart the No 4 blast furnace at its Port Talbot works in south Wales, 10 months after it was mothballed amid the recession.

The company had already announced that it is restarting production at the Llanwern strip mill at nearby Newport, because of improving business.

One expert called it a sign of growing confidence in manufacturing.

The Port Talbot furnace was shut down last December, alongside one in Scunthorpe and in the Netherlands.

Corus said the restart will give its UK strip products arm more flexibility.

I didn't think we would see some of these plants returning to production at all, let alone coming out of mothballs
Jonathan Deacon, University of Wales Newport Business School

However, the restarts at both sites will not reverse any of the 528 job losses at the Llanwern plant.

The shutdowns were part of a 30% cut in production planned over the following six months due to weakening demand in Europe.

Initially, the Port Talbot shutdown had been scheduled for two months but that was extended at the recession continued to hit orders.

Corus, which is owned by India's Tata Steel, had blamed the global economic downturn for the cuts.

'Little green shoots'

Dr Jonathan Deacon, of the University of Wales Newport Business School, said the Port Talbot furnace restart was an indication that confidence was returning to manufacturing, particularly in Europe.

He told Radio Wales: "I didn't expect this so soon. I didn't think we would see some of these plants returning to production at all, let alone coming out of mothballs.

"It reflects some of the little green shoots that people talk about happening elsewhere in the economy.

"Sadly I don't think they are necessarily in the UK economy.

"They are slightly further afield, in Germany in particular.

"Those markets are requiring things being made. Those things are made out of steel."

Dr Deacon said he thought Corus's decision to prepare its Port Talbot and Llanwern plants for increased production was the firm having "a little bit of punt" on the confidence returning to the market.

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