British Steel has announced plans to shut down its two blast furnaces [1] at the Scunthorpe steelworks, putting up to 2,700 jobs at risk. The decision came after the company failed to secure a financial rescue package from the UK government, marking a significant blow to the nation’s steel industry.
The Chinese-owned firm, Jingye Group, has cited mounting financial pressures, including high environmental costs and the impact of tariffs, as key reasons for the closure. Since acquiring British Steel in 2020, Jingye has invested over £1.2 billion to maintain operations amidst ongoing production instability and losses of approximately £700,000 per day. Despite these efforts, the blast furnaces and steelmaking operations are deemed unsustainable under current market conditions.
British Steel had sought government support for a transition to greener steel production, proposing the installation of electric arc furnaces (EAFs) to replace the high-carbon blast furnaces. However, negotiations for a £1 billion investment fell short, with the government offering only £500 million. The company has now entered a formal consultation process with its workforce and unions to discuss the closure and its implications.
The Scunthorpe steelworks, which has been operational since the 1890s, is vital in UK infrastructure projects, supplying rail tracks and structural steel for construction. The potential closure has sparked concerns about the future of domestic steelmaking and its impact on national security. Trade unions have urged the government to resume negotiations and safeguard the site, emphasizing its strategic importance.
British Steel CEO Zengwei An described the announcement as “an extremely difficult day” for employees and their families. He assured stakeholders that the company remains committed to engaging with its workforce, unions, suppliers, and customers during this challenging period.
The closure of Scunthorpe’s blast furnaces is part of a broader trend in the UK steel sector, with other major players like Tata Steel also shifting towards electric arc furnace technology. Without decisive action, the UK risks losing its primary steelmaking capacity, raising questions about the industry’s future and its ability to compete globally.
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[1] British Steel to close blast furnaces, risking 2,700 job losses https://news.az/news/british-steel-to-close-blast-furnaces-risking-2-700-job-losses