MPs are calling on Britain’s construction sector to give more support to the country’s struggling steel industry after the closure of a giant steelworks in Teesside.

A group of cross-party MPs has signed an open letter calling for builders to source steel domestically rather than look to cheap Chinese imports of the metal.

The call follows the closure of SSI’s plant at Redcar, which went into liquidation on October 2 with the loss of 1,700 jobs. A major factor behind its failure was an inability to compete with low-cost imported steel.

SSI UK, a unit of Thailand’s largest steelmaker Sahaviriya Steel Industries, collapsed after what the UK Government called a “last minute and unrealistic” request for the taxpayer to make an “open-ended” funding commitment to maintain its coke ovens in Redcar was turned down.

In the letter, a dozen MPs from around the country warned that Britain’s steel industry – which contributes £9.5bn a year to the economy – was in “a critical situation, with the existence of some of our largest steel producers at risk” .

SSI’s announcement that it was mothballing the Redcar plant was “a heart-breaking situation for the workers, their families and the wider community”, the MPs added.

They now want construction businesses to sign the Charter for Sustainable British Steel, which pledges to buy steel that meets UK standards on sustainability and sourcing.

Nia Griffith MP, chairman of the All-Party Parliamentary Group for Steel and Metal Related Industry, said: “I am alarmed at the amount of Chinese steel in the UK supply chain. Importing Chinese steel from thousands of miles away to the UK also has an enormous environmental impact – whereas British manufacturers subscribe to the very highest sustainability criteria.”

• The beginning of the end for British steelmaking

As China’s economy has slowed, its steel industry has been left with a huge overcapacity and has been dumping surplus metal abroad.

According to UK Steel, Britain produces about 12m tonnes of steel a year, but Chinese mills have an annual overcapacity of 250m tonnes, with excess production sold abroad at knock-down prices.

Chinese steel accounted for 2pc of UK steel demand in the first half of 2011, but it is set to hit 8pc by the end of this year.

Britain’s steel makers are also hampered by the strength of sterling, high energy costs, environmental levies and business rates that are more onerous than those faced by foreign competitors.