Why is British Steel in trouble, who owns it and what will the government do?

The United Kingdom government is ready to take control of an important British steel plant in Scunthorpe, which is at risk of closing Inmantad.

Parliamentarians have been called their Easter rest to approve an emergency law that would maintain the Chinese property site in operation.

The British Steel plant in Scunthorpe, Lincolnshire, employs 2,700 people, approximately three quarters of the entire workforce of the company.

It is the last plant in the United Kingdom capable of producing virgin steel, which is used in main construction projects such as new buildings and railways.

Two large ovens are used to produce steel, which has Ferwer imperfections that recycled steel made in other parts of the country.

If the plant stopped producing the Virgin steel, then the United Kingdom would become the only member of the G7 Main Economies Group without the ability to do so, a perspective that the Government considers a risk to the country’s long -term economic security.

The company was founded in 2016 when Tata Steel sold its division of long products in Scunthorpe to the private investment firm Graybull Capital by a token £ 1.

The new owners renamed the British Steel business.

After a period of financial instability, British Steel was tasks for the government’s insolvency service in 2019 and then acquired by the Chinese manufacturing firm Jingye the following year.

The company says that the plant continues to lose £ 700,000 per day despite £ 1.2 billion of investment. A 45 -day consultation on employment cuts has begun.

Jingye says that explosions are no longer sustainable, blaming the “highly challenging” market conditions, tariffs and costs associated with the transition to lower carbon production techniques.

The underpants generate the extreme heat needed to produce virgin steel and feed with coal and coquization iron granules, but the supplies of these raw materials in the Scunthorpe plant are being exhausted.

That adds a time pressure to British steel conversations because one closes an explosion, it is an expensive and complex process to restart it again.

Last month, the company was Accused by one of its clients not to order raw materials I needed to keep the site running, a claim that Jingye rejected.

The production of steel from the United Kingdom has been falling for several decades and the financial pressures facing the industry were persecuted in March when the United States imposed a 25% rate on any amount that matters.

Global steel overproduction has created “excess steel in the international market,” according to a UK government information about the industryThat has lowered prices. British manufacturers also face higher costs, partly in electricity than in other places.

The government has They ordered the parliamentarians to return from their Easter breaks for an unusual weekend in the commonssince it weighs options to protect the site.

On Friday, Sir Keir Starmer announced plans to accelerate a law through Parliament that would give the government the power to assume control of site operations.

That would include the ability to order raw materials to keep the ovens in operation and direct the workforce and the Board of the Company.

The Government told the United Kingdom Management of the company that keeps the site in operation, and the emergency law will ensure that any employee who is fired by the Chinese owners can be reinstated.

This intervention has no nationalization, when a government takes possession and control of a company, but Sir Keir said the government would do “everything possible” to “protect” the United Kingdom’s steel industry.

The decision of the prime minister to announce the emergency legislation follows the tense conversations between the Government and Jingye earlier this week, which seem to have broken down.

The Government He offered to buy the raw materials necessary to keep the ovens in progress But Jingye did not agree with that proposal.

The unions have said that the situation is in a “cliff”, while the community union described the lack of supplies necessary to maintain operating furnaces as an “extreme emergency.”

Linda Mculloch of the Unite Unite said they would like the national government “to keep steel alive in the United Kingdom.”

The GMB union has elevated the BBC to the groups about the way Jingye is operating the plant.

There are 1,160 businesses in the United Kingdom steel industry, which directly support 40,000 companies throughout the country, According to the Government figures.

Tata Steel in Port Talbot in Wales was once the largest producer of virgin steel in the United Kingdom, but turned off his short oven in September 2024, saying that he was losing the day of £ 1.7ma.

An agreement was reached with the United Kingdom government that saw it compromise £ 500 million to help the company move on to more green manufacturing forms.

Other steel manufacturers in the United Kingdom include Liberty Steel, Celsa, Marcegaglia and otokumpu.

Liberty Steel also has a plant in Scunthorpe that faces the closure. More than 120 jobs are at risk, with the bosses blaming High energy costs.

In 2023, the United Kingdom’s steel industry contributed to £ 2.3 billion to the economy of the United Kingdom, equivalent to 0.1% of the total economic production of the United Kingdom and 1.0% of manufacturing production.

In the same year, the United Kingdom produced 5.6 million tons of raw steel, or 0.3% of the world total. In comparison, China produced more than 1,000 million tons, 54% or global production.

The EU produced 126 million tons of steel in 2023, 7% of the world total. Compared to EU countries, the United Kingdom was classified as the eighth producer of the largest steel, after Germany, Italy, Spain, France, Austria, Poland and Belgium.