Tata Steel tells supplies they need to make immediate 10% cut to prices

Tata Steel has told its suppliers that they must cut their prices by 10% with immediate effect and 30% in the long term.

The demand was made in a letter to its suppliers, signed by the procurement director of Tata's Long Products Europe, Lorraine Sawyer.

The letter, which has been seen by the Telegraph, implies that the cuts must be made unless the suppliers want to risk being dropped.

"Should you - for any reason - be unable to support us in our efforts, we will need to fully consider other options," the letter reads.

It says the company is facing "a difficult business situation" and that to "ensure a long-term sustainable business we have launched a transformation programme to improve our market performance and reduce our cost base".

This cannot be achieved "without the support of our valued suppliers", the letter says.

A spokesperson for Tata told the newspaper: "We have had an excellent response with positive and innovative ways we can work together.

"The current position in UK steel is no secret and has been explained in all communications with all partners as we look for collective ways to find better solutions to solve the difficult and challenging conditions."