Tata is locked in talks over the future of the site, with hopes high for progress on a potential joint-venture with ThyssenKrupp.
The negotiations had raised fears of work being transferred from the UK to a ThyssenKrupp-owned plant in Ijmuiden in the Netherlands.
However, the Sunday Telegraph reported this weekend that the “conversion cost” per tonne of producing steel at the Port Talbot steelworks.
While costs vary across the full range of products being produced at the South Wales site, some offerings such as cold strip and galvanised strip can reportedly be made almost a third cheaper in Port Talbot.
A source close to the steelworks told City A.M. that while they recognised the figures, there remained bigger picture concerns on future of the steelworks.
A Tata Steel spokesman said: “Although great strides have been made in Tata Steel UK to reduce costs, not just in production, but across the whole business, it remains the case that our overall costs in the UK remain higher than those in the Netherlands.”
It comes as fresh estimates from the British Steel pension trustees suggest the scheme's deficit has shrunk dramatically in the aftermath of the Brexit referendum.
Previously put at £700m, the funding gap is now believed to be around £50m, although it will not be formally calculated until next year.
City A.M. understands it has been substantially boosted by the drop in the value of sterling since June.
The deficit has been regarded as one of the largest obstacles in Tata’s negotiations with ThyssenKrupp, meaning the reduced deficit could raise hopes of progress.
The Department for Work and Pensions is yet to publish a response to a consultation on potential remedies for the scheme, which closed over the summer.