Hargreaves Services says awaiting clarity on impact of SSI mothballing

LONDON (ShareCast) - (ShareCast News) - Hargreaves Services (Other OTC: HGRVF - news) noted news that Sahaviriya Steel Industries, for which it provides material handling and coal procurement services, is looking to mothball steelmaking at its Redcar steelworks and said it was awaiting clarification of the plans. Hargreaves said once it receives clarification, it will evaluate the likely impact on the services it provides to the plant and will update the market in due course.

It (Other OTC: ITGL - news) added that as reported in the preliminary results on 11 August 2015, these contracts contributed around £4m of operating profit in the last financial year.

SSI, which is the UK's second-largest steelmaker behind Tata, said it was halting iron and steelmaking operations at the Redcar plant as the business has been hit by a sharp drop in steel prices.

Cornelius Louwrens, SSI UK business director and chief operating officer, said: " The problems within the global steel industry have been well publicised in recent weeks and our decision follows a major deterioration in steel prices affecting our business during the course of this year.

"Our parent company and other stakeholders have given great support to the business, and the decision to pause our iron and steel production has been taken reluctantly and in a scenario where no other practical options are available at present." SSI, which is a Thai firm, directly employs 2,000 people in the UK and 1,000 contractors.

At 1445 BST, Hargreaves shares were down 3.9% at 384.25p.