The Culture Secretary Lisa Nandy opined that a commercial solution for British steel is still within reach as the government considers nationalising the Chinese-owned business. She views the company as a pivotal part of the country’s economy for years to come as it employs over 2,700 people. She believes that their future is “achievable and within sight”, according to BBC.
Sparking concerns, the company faces the risk of running out of raw materials within weeks of operations, while running the blast furnaces making high-grade steel. Reports opine, that this concern rose as the steel industry deals with a 25% tariff on exports to the US, which came into force last month.
British Steel, acquired by China’s Jingye Group in 2020, has stated that its two blast furnaces in Scunthorpe are “no longer economically viable. Jingye stated that it has invested more than £1.2bn into British Steel to maintain operations while suffering financial losses of around £700,000 a day.
“I am absolutely confident that we are doing every single thing that we can to secure the future of British Steel and particularly the site at Scunthorpe,” said Nandy.
Simon Boyd, managing director of REIDsteel, a British Steel customer, told the BBC that government intervention was the only solution if they wanted to keep steel making in the UK. He added, while also warning that ” the firm only has days left to secure the order of materials to prevent the forced closure of the blast furnaces over the next month. We’re talking days.”
Even though the government has offered £500m of support to partially fund a transition from the blast furnace to a more energy-efficient electric arc furnace, the move has been rejected by the company. According to the company, electric arc furnaces cannot make new “virgin steel” from iron ore. Instead, they are used to recycle steel scrap, with the risk of imperfections.
Mr Boyd said,”Scunthorpe’s current blast furnaces produce the highest grade of steel available.”
“If we lose that capability, we’ll be wholly reliant on countries like China producing the blast furnace steel and electric arc furnaces, which make steel out of scrap, are all well and good, but they’re at least five years away,” he said.
Experts warn that restarting the blast furnace once idled would be both technically difficult and prohibitively expensive—further deepening the plant’s existing vulnerabilities.
Roy Rickhuss, general secretary of the UK’s largest steelworkers union Community, told the BBC he agreed with the prime minister that all options should be on the table, and that includes nationalisation”.
Chancellor Rachel Reeves stated that all options remain on the table when asked whether the government would nationalize British Steel’s furnaces in Scunthorpe. However, the chancellor did not confirm whether the plant would be able to secure new raw materials in time to keep the blast furnaces operational. She noted that active discussions are ongoing with both the owners and the trade unions.
Nigel Farage, leader of Reform UK, urged the government to nationalise the Scunthorpe plant, secure the necessary raw materials, and then find a consortium to manage its operations.
“Unless within three days that Scunthorpe plant is nationalised, those blast furnaces will go,” he told BBC. “We will become the only country in the G20, the only major economy of the planet, that doesn’t produce primary steel.”
He described steel production as a vital strategic national asset and argued that the government’s push for net zero carbon emissions is leading to “de-industrialisation before our very eyes. ” I want Keir Starmer to act,” he added.
Conservative leader Kemi Badenoch says she wants the government to continue exploring commercial options for the British Steel site at Scunthorpe, citing her government’s actions when the Port Talbot plant was threatened. During her visit to Worcestershire, she told broadcasters that while some jobs were lost in Port Talbot, the decision was made on commercial grounds to minimize the burden on British taxpayers.
Liberal Democrat leader Sir Ed Davey said, “With Trump’s tariffs causing enormous damage and Putin waging war in Europe, we can’t afford to lose this strategically important industry or these vital British jobs.”
He urged ministers to explore all options, adding, “As a first step, the government should designate steel as a nationally strategic asset, using British steel in infrastructure projects from defence to renewable energy.”
Parts of England and Wales are supporting nationalisation and a switch to ‘green steel’. Co-leader Adrian Ramsay opined that the country must not leave the future of steel communities in the hands of multinational companies or unhinged American presidents.