China-owned British Steel has announced plans to shut down its two blast furnaces, potentially leading to the loss of up to 2,700 jobs. The company cited “highly challenging market conditions, the imposition of tariffs, and higher environmental costs” as key reasons behind the decision. If confirmed, the closures could take effect as early as June.
British Steel, owned by China’s Jingye Group, has been struggling for years with loss-making operations at its Scunthorpe plant in northeast England. The company has been in prolonged discussions with the UK government, seeking financial support to transition toward greener steel production. However, after months of negotiations, no agreement has been reached.
On Thursday, the company stated it was making the “difficult decision” to begin consultations regarding the closure of its blast furnaces and other affected operations.
Steel Industry in Decline
The move marks another chapter in the decades-long decline of Britain’s steel industry, which has struggled to compete against low-cost imports and the high energy costs of domestic production. Additionally, former U.S. President Donald Trump’s 25% tariff on imported steel, imposed in 2018, has added further pressure. British Steel claims that its Scunthorpe operations are currently losing $905,240 daily.
According to industry group UK Steel, Britain’s steel exports to the U.S. are valued at over 400 million pounds annually, accounting for about 5% of total UK steel exports.
British Steel has stated it will continue working with the UK government to explore alternatives. Business Minister Jonathan Reynolds confirmed ongoing negotiations, emphasizing the need for job security before committing public funds. “I need guarantees on jobs if I’m putting public money in,” Reynolds said.
Historic Shift in British Steelmaking
Steel production at Scunthorpe dates back to 1890, and if the closures proceed, the UK will no longer have any operating blast furnaces. Instead, the country is shifting toward electric arc furnaces, which produce steel using recycled materials and are considered less carbon-intensive.
With the future of British steelmaking at a crossroads, thousands of workers now face uncertainty as the industry navigates economic and environmental challenges.