British Steel is launching a consultation that could see the closure of its two blast furnaces at Scunthorpe, putting up to 2,700 jobs at risk out of a workforce of 3,500. Since 2020 the shareholder of British Steel, Jingye, has invested more than £1.2bn to maintain operations amid ongoing production instability and significant financial losses of around £700k a day. The situation has not been helped by the recent announcement from the Trump administration of the 25% levy imposed on all steel imports to the US.
Investments to date include over £300m in strategic capital projects such as a state-of-the-art mast service centre in Skinningrove, a rail stocking facility and a new billet caster.
Despite this, 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 company had sought support from the UK government for a major capital investment in two new electric arc furnaces (EAF). However, following many months of negotiations, no agreement has been reached.
As a result, the decision has been made to consult with employees and to consider proposals to close the blast furnaces and steelmaking operations and reduce rolling mill capacity.
The company began formal consultation with its workforce and unions yesterday (27 March 2025). The consultation will propose three options:
- Closure of the blast furnaces, steelmaking operations and Scunthorpe Rod Mill by early June 2025
- Closure of the blast furnaces and steelmaking operations in September 2025
- Closure of the blast furnaces and steelmaking operations at a future point beyond September 2025
In the meantime, British Steel is continuing to work with the UK government to explore options for the future of the business.
Commenting on the announcement, British Steel CEO, Mr Zengwei An, 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.”
Trade group UK Steel has warned that the move will mean the UK losing vital steelmaking capability, and would leave industries such as transport, construction, rail and infrastructure reliant on international supplies. Speaking to the BBC, Director General of UK Steel, Gareth Stace, said British Steel’s announcement was a “pivotal moment” for the sector and the steel industry was “officially in a crisis”.
The announcement was condemned by the unions as it will make the UK the only G7 country unable to make steel from scratch, following the Indian conglomerate Tata’s announcement last September that it was closing its two blast furnaces at Port Talbot in South Wales. Community union General Secretary Roy Rickhuss called it “a dark day” and urged Jingye and the UK government “to resume negotiations before it is too late”.
The GMB union called it “devastating news”, while Unite General Secretary Sharon Graham said the potential job losses were “a disgrace”.
“British Steel is guilty of trying to hold the government to ransom, while using its dedicated workforce as pawns,” she said.
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