For the last of Wales's steelmen, a thirst-quenching beer is an essential end to a shift in the furnaces at Corus's steel plant. Recently Sherwin Carr, manager of the steel workers' sports and social club beside the giant plant at Port Talbot, has noticed a dramatic change in his customers' drinking habits.

“Everyone used to drink draught,” he said, “but in the past two or three months I have been selling a lot more beer in cans — two or three times as much as I used to.” The difference: a pint of draught bitter is £2.35, but a can is £1.85.

Mr Carr added: “There's no doubt people are nervous about the future. The plant has been a lot quieter — you don't see as many flares or plumes of water vapour these days.” Even the local Corus rugby club has stopped selling subsidised sausages and rolls, as sponsors cut back or drop out.

Port Talbot's steelmen have been living on their nerves since Corus was taken over three years ago by the Indian conglomerate Tata. Demand for steel has collapsed and the price of the Port Talbot plant's main product has halved. One of the site's four blast furnaces has not been used since last year. A Corus spokesman said yesterday: “It had been hoped to put it back into operation but unfortunately that hasn't been possible.”

Although the plant escaped the big job cuts imposed at the Llanwern rolling mill in Newport, the figures at Port Talbot conceal a less visible cull. There are 3,500 people employed directly at the steelworks, which sprawls for more than a mile between the South Wales hills and the sea, and almost the same number again working as contractors.

It is the contractors who have borne the brunt of the cutbacks, with hundreds being paid off in the past fortnight, according to workers. They provide services on the site, operate machinery and drive vehicles. In the days of British Steel they would have been employed directly but their jobs were hived off with privatisation.

One steel worker who asked not to be named said: “The plant supports hundreds of small businesses in the surrounding area and laying off more than half of them is going to have a major impact.”

Port Talbot has the appearance of never having recovered from the recession of the Eighties, let alone the early Nineties. It was once been home to the actors Richard Burton, and Sir Anthony Hopkins, who lived beside Ron's Pie Shop, but the Plaza cinema has been boarded up for years, its windows broken, buddleia sprouting from its art deco balcony and the beige tiles that cover its frontage streaked with green.

Unlike Newport, which has attracted investment from semi-conductor makers to call centres, Port Talbot has stayed a one-horse town, its 35,000 residents dependent on one main industry. Other businesses have sprung up, but have thrived in spite of rather than because of their location.

Paul Reynolds, who has built up one of Britain's largest Italian motorcycle dealerships over 33 years, says: “We are matching last year on sales, though our turnover is down. But we do business all over the country, not just in Port Talbot.”

Ron Evans, the third-generation proprietor of Ron's Pies, says that business is good, largely thanks to his bestselling product, the eponymous Evans Pie. The HazzyDayzz Hydroponics Centre, which sells equipment for cultivating cannabis, also seems to be doing well. But elsewhere, premises are boarded up, with no one bothering to put up To Let signs.

The biggest business is still there, but one worker coming out of the plant said: “The atmosphere in there is gloomy — it is not a happy place to work. There are quite a few people who won't be sorry to see the back of the place when the axe finally falls.”

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