The clock is ticking on the future of British Steel as a unique national capability, with officials attempting to keep the country’s last blast furnaces from slipping into a crippling shutdown.
Industrial furnaces melt raw materials at 1,600°C but if the temperature drops below a certain level the Scunthorpe plant’s fate could be sealed, as there is no guarantee the furnaces could be restarted. As the last remaining site to forge virgin steel in the UK, it was feared that the company was deliberately attempting to turn off the plant.
The UK government dramatically seized control of the private company in the first Saturday sitting of parliament since 1982. Prime Minister Keir Starmer pushed through emergency legislation to nationalise the Scunthorpe plant, in northern England, ultimately taking it from Chinese firm Jingye.
Britain reliant on Chinese imports?
Jingye’s bosses had been in negotiations for months with the government, seeking a multimillion pound deal to subsidise the plant. It had been losing £700,000 a day, mainly due to the very high energy costs involved in manufacturing the country's railway lines and other elements of national infrastructure.
Government officials have been despatched to a port on the nearby Humber estuary to obtain the coal and iron pellets urgently needed to keep the furnaces burning. A spokesperson for Mr Starmer said two shipments containing iron ore, pellets and coking coal had docked at the local port, with a third on its way.
"We are now confident in securing the supply of materials needed," the spokesperson told reporters. "Obviously we'll be working with management to identify further raw materials needed to keep a steady pipeline and to keep the furnaces burning."
The anxiety stems from the very real possibility that in a world of tariffs and threatened free trade, Britain will lose its sovereign capability to produce steel.
The product is vital to the UK economy as the metal is needed for rail tracks, construction industry rods, caterpillar tracks and some military equipment. Scunthorpe produces more than 80,000 tonnes of steel a year, so closure would have left Britain without its own steel production for the first time since the Industrial Revolution.
But that production comes at a high cost, totalling £230 million annually, Business Secretary Jonathan Reynolds has said. After months of negotiations with Jingye, on Friday the UK government concluded that its Chinese bosses were not interested in money and had ceased to act in good faith. This created the need for Saturday's emergency legislation. While that was rapidly achieved, the fallout with China has deeper implications.
It has been alleged that the reluctance to keep the fires burning was an act of deliberate disruption to increase the UK's reliance on cheap Chinese steel. Gary Smith, general secretary of the GMB union, said workers were “legitimately concerned about industrial sabotage”. In interviews on Sunday, Mr Reynolds refused to rule it out but also suggested it could instead be “neglect”.
The timing is also diplomatically troubling for London as it seeks a thaw in relations with Beijing, potentially to open up greater trade. The UK government’s move is also likely to be an acceleration of an industrial reset for Britain, in the light of destabilised manufacturing lines that have been further threatened by US President Donald Trump’s tariffs.
More to come?
The new legislation put British Steel under the direct control of Mr Reynolds, allowing him to demand the purchase of raw materials. The Steel Industry (Special Measures) Bill also allows him to order the company to keep the furnaces running, with failure to comply leading to their nationalisation.
Loss of the furnaces would have meant Britain was the only G7 country without the ability to make steel, and would have meant about 3,500 jobs lost. While many global furnaces have converted to electric power, Scunthorpe’s are ageing and inefficient and will have to close by 2050 to meet UK net zero pledges.
