Steel manufacturer British Steel has announced that it has launched a consultation on the proposed closure of its two blast furnaces and steelmaking operations, as well as a reduction of steel rolling mill capacity, in Scunthorpe.
British Steel was bought by Chinese multi-industrial company Jingye Group on 9 March 2020. Since then, British Steel says Jingye has invested more than £1.2 billion to maintain operations, amid ‘ongoing production instability and significant financial losses of around £700,000 a day’.
The steelmaker explained that the blast furnaces and steelmaking operations are ‘no longer financially sustainable due to highly challenging market conditions, the imposition of tariffs, and higher environmental costs relating to the production of high-carbon steel’.
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BBC News has reported that between 2,000 and 2,700 jobs could be affected by this closure.
Three options have been proposed. The first would see the closure of the blast furnaces, steelmaking operations and Scunthorpe Rod Mill by early June 2025. The second option would be to close the blast furnaces and steelmaking operations in September 2025. And the third and final option would involve the closure of the blast furnaces and steelmaking operations at a future point beyond September 2025.
British steel says it previously sought support from the UK Government for a major capital investment in two new Electric Arc Furnaces (EAF), but after months of negotiations, no agreement has been reached. It says it will continue to work with the UK government to explore options for the future of the business.
Zengwei An, British Steel’s CEO, said: “We understand this is an extremely difficult day for our staff, their families, and everyone associated with British Steel. But we believe this is a necessary decision given the hugely challenging circumstances the business faces.
“We remain committed to engaging with our workforce and unions, as well as our suppliers and customers during this time.”
Charlotte Brumpton-Childs, national officer at trade union GMB, said: “This is devastating news for the people of Scunthorpe and the whole of UK steelmaking. But it’s not too late: we urge Jingye and the government to do everything in their power to save this vital domestic industry.”
