Jennifer Money
Journalist
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The British government is about to take control of a large British steel factory in Scunthorpe, which risks imminent closing.
The deputies were recalled from their Easter holidays to adopt an emergency law which would operate the site belonging to the Chinese.
What are British Steel and how many people work there?
The British Steel factory in Scanthorpe, Lincolnshire, employs 2,700 people, or about three-quarters of the entire business workforce.
This is the last factory in the United Kingdom capable of producing Virgin Steel, which is used in the main construction projects such as new buildings and railways.
Two huge stoves are used to produce steel, which has fewer imperfections than recycled steel made elsewhere in the country.
If the factory ceases to produce steel Virgin, then the United Kingdom would become the only member of the G7 group of leading economies without the ability to do so – a prospect that the government considers a risk to the country’s long -term economic security.
Who owns British Steel and why does he lose money?
After a period of financial instability, British Steel was taken over by the government’s insolvency service in 2019, then acquired by the Chinese steel manufacturing company Jingye the following year.
The company claims that the factory continues to lose £ 700,000 per day despite 1.2 billion pounds in investment. He started a 45 -day consultation on the job cuts.
Jingye says that the high stoves are no longer durable, blaming the “very difficult” market conditions, the prices and costs associated with the transition to low carbon production techniques.
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High furnaces generate the extreme heat necessary to produce virgin steel and are fueled by coal and iron lozenges – but the supply of these raw materials to the Scantinpe factory is low.
This adds time pressure to British steel discussions because once a high stove stops, it is an expensive and complex process to restart it again.
Last month, the company was accused by one of its customers not to order the raw materials necessary to maintain the site, a complaint that Jingye rejected.
The production of British steel has been decreasing for several decades and the financial pressures confronted with industry were strengthened in March when the United States imposed a 25% price for any steel it imports.
The global overproduction of steel has created “an overabundance of steel on the international market”, according to a briefing of the British government on industry, which has reduced prices. British manufacturers are also faced with higher costs, especially on electricity, than elsewhere.
Could the British government take control?
The government has ordered deputies to return from their Easter breaks for an unusual weekend seated in the municipalities, because it weighs the options to protect the site.
On Friday, Sir Keir Starmer announced his intention to acid a law thanks to the parliament which would give the government the power to assume control of some of the operations of the site.
This would include the possibility of ordering raw materials to maintain the ovens and directing the workforce and the company’s board of directors.
The government has told the company’s United Kingdom management to maintain the operational site, and the emergency law will guarantee that Chinese owners can be reintegrated.
This intervention continues to nationalize – when a government takes possession and control of a company – but Sir Keir said that the government would do “everything possible” to “protect” the steel industry of the United Kingdom.
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Sir Keir Starmer said he was determined to maintain British steel operations
The Prime Minister’s decision to announce emergency legislation follows out of tense talks between the government and Jingye earlier this week, which seem to have been largely decomposed.
The government proposed to buy the raw materials necessary to maintain the ovens, but Jingye did not accept this proposal.
The unions said that the situation is on an “cliff edge”, while the community union described the lack of supplies necessary to maintain operational ovens as an “extreme emergency”.
Linda McCulloch de l’Union Unite said they would like the national government to keep steel alive in the United Kingdom. “
The GMB union has raised concerns to the BBC on how Jingye operates the factory.
Who else product of steel in the United Kingdom?
According to government figures.
Tata Steel in Port Talbot in Wales was once the largest producer of Virgin Steel in the United Kingdom, but he disabled his high stove in September 2024, saying that he was losing £ 1.7mm.
An agreement with the British government was concluded, which saw him hired 500 million pounds sterling to help the company move to greener forms of steel.
The other acidlers of the United Kingdom include Liberty Steel, Celsa, Marcegaglia and Outokumpu.
Liberty Steel also has a scunning factory facing the closure. More than 120 jobs are threatened, the bosses accusing high energy costs.
In 2023, the British steel industry contributed 2.3 billion sterling pounds to the British economy – equivalent to 0.1% of economic production in the United Kingdom and 1.0% of manufacturing production.
The same year, the United Kingdom produced 5.6 million tonnes of raw steel, or 0.3% of the world total. In comparison, China has produced more than 1,000 million tonnes, 54% of world production.
The EU produced 126 million tonnes of steel in 2023, 7% of the world total. Compared to the EU countries, the United Kingdom has classified itself as the eighth largest steel producer, after Germany, Italy, Spain, France, Austria, Poland and Belgium.
