British Steel will consult on the closure of its two blast furnaces, steelmaking operations and a reduction of steel rolling mill capacity in Scunthorpe.
According to media reports, up to 2,700 jobs will be at risk out of a workforce of 3,500. Since 2020 the Chinese shareholder of British Steel, Jingye, has invested more than £1.2 billion to maintain operations amid ongoing production instability and significant financial losses of around £700k a day.
Investments to date include over £300 million in strategic capital projects such as a 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, says the company.
British Steel 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 will begin a formal consultation with its workforce and unions from 27 March, with three options being proposed:
- 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
''We believe this is a necessary decision given the hugely challenging circumstances the business faces.''
Zengwei An, CEO, British Steel
Commenting on the announcement, British Steel CEO, 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.”
"We are now on the cusp of becoming the only G7 country without domestic primary steelmaking capacity, it is no exaggeration to say that our national security is gravely threatened."
Roy Rickhuss, general secretary, Community
Community union general secretary Roy Rickhuss called the announcement ‘a dark day’ and has urged Jingye and the UK Government ‘to resume negotiations before it is too late’.
He warned: "We are now on the cusp of becoming the only G7 country without domestic primary steelmaking capacity, it is no exaggeration to say that our national security is gravely threatened."