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Britain nationalizes British Steel plant amid financial and trade pressure
The Scunthorpe site employs 2,700 people and the plant has been described as losing about £700,000 per day before closure talks, while the UK is said to be paying roughly £1.3 million a day to run it.
British Steel has been taken into public ownership after years of uncertainty about the future of the Scunthorpe steelworks in Lincolnshire, a facility that employs 2,700 people, about three quarters of the company’s workforce, according to BBC Business. The site is the last in the UK producing virgin steel, which the UK government says is important for economic security because the country would be the only G7 economy without the ability to make it. The UK had already moved months earlier to control the plant, though it was still owned by China’s Jingye Group. BBC Business notes that Jingye is now seeking compensation for the nationalisation, after the UK government brought British Steel into public ownership on 16 July. Jingye previously said the plant was losing around £700,000 a day and started a consultation on potential closure, arguing that the blast furnaces were no longer financially sustainable. BBC Business cites factors such as highly challenging market conditions, tariffs, and costs tied to shifting to lower carbon production methods. The National Audit Office, in a March report, said the Scunthorpe steelworks was costing the government about £1.3 million a day. BBC Business also points to longer term declines in UK steel production and highlights the impact of a 25% US tariff on imported steel, amid global over production that has pushed prices down, according to a UK government briefing.