British Steel, owned by China’s Jingye Group, has confirmed plans to shut down its blast furnaces and other operations in England, citing financial strain caused by tariffs, challenging market conditions, and increased environmental costs. The move could result in the loss of up to 2,700 jobs at its main site in Scunthorpe, northern England.
In a statement, the company said, “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.”
The closure plan, first proposed in late 2023, follows U.S. tariffs imposed by former President Donald Trump, which included a 25-percent duty on steel imports. Britain exports approximately 10 percent of its steel to the United States, and the tariffs have added pressure to the struggling industry, already facing tough competition from Asia.
British Steel currently employs around 3,500 workers in the UK. The company announced it will consult on closing both blast furnaces, reducing steel rolling mill capacity, and transitioning from coal-powered blast furnaces to electric arc furnaces, which produce lower-carbon steel.
The UK government had proposed a financial support package, reportedly worth £500 million, as part of an investment exceeding £2 billion to facilitate the transition. However, British Steel declined the offer. Minister for Industry Sarah Jones told Parliament, “It is regrettable” that the company rejected the proposal.
Business Secretary Jonathan Reynolds emphasized that discussions with Jingye were ongoing, stating, “I know this will be a deeply worrying time for staff and, while this is British Steel’s decision, we will continue working tirelessly to reach an agreement with the company’s owners to secure its future and protect taxpayers’ money.”
Prime Minister Keir Starmer recently pledged £2.5 billion to support the UK steel sector, with plans to establish a long-term strategy for the industry. His spokesperson noted, “We’ll be publishing a plan for steel, setting out how we achieve a sustainable future for the industry and local communities.”
Roy Rickhuss, general secretary of the Community union, described the announcement as “a dark day for our steel industry and for our country.” He added that Jingye “have not ruled out retaining the blast furnaces during a transition to low-carbon steelmaking if they can secure the backing of the government.”