“The market for stainless precision strip is oversupplied and this business in Sheffield has been loss-making for several years,” the world’s No. 2 stainless steel maker said. “The proposal is part of Outokumpu’s performance improvement actions to ensure global competitiveness.”

The company’s share price jumped 13. 9 percent to close at US$19. 47 (£13. 68) on the Helsinki Stock Exchange. The plant closure, at the Meadowhall site in northern England, will close in the first quarter of next year. The closure is expected to result in annual savings of US$22. 8 million (£16 million) from the second quarter of 2009, the company said. Write-downs and provisions of US$92 million (£65 million) will be recorded in the third quarter, it said. The Meadowhall plant produces specialized, very thin forms of stainless steel strip products.

Based in Espoo near the Finnish capital, Outokumpu employs 8,200 workers in about 30 countries. Outokumpu became the world’s second-largest stainless steel maker in 2000 when it merged steel operations with Britain’s Avesta Sheffield to form AvestaPolarit. It has declared a goal of becoming the world’s No. 1, and has gradually divested its core production.

The steel is used to make items such as scalpels, industrial blades, automotive compnents, parts use in electrical products including TVs. and mobile telephones. The factory is situated in the constituency of David Blunkett. Local trade union officials are reported to be actively opposing the closure of this very important factory which manufactures highly specialised special steel products.