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British Steel plans to close its two blast furnaces and steelmaking operations in Scunthorpe, putting up to 2,700 jobs at risk in a move described by unions as “devastating”.
The company, which is owned by China’s Jingye, said it would immediately start consultations with its workforce and unions on redundancies stemming from the planned closure of the blast furnaces and steelmaking alongside a reduction of steel rolling mill capacity.
The proposed closures will affect between 2,000 and 2,700 workers, out of a total workforce of about 3,500, British Steel said, and bring an end to steelmaking in Scunthorpe after 160 years of production.
Roy Rickhuss, the general secretary of the union Community, said the UK was on the brink of becoming the only G7 country without domestic primary steelmaking, and “it is no exaggeration to say that our national security is gravely threatened”.
The industry body UK Steel said the Scunthorpe closure would mean that the UK loses vital steelmaking capabilities in rail, heavy sections, and light sections, critical to transport, infrastructure, and construction, leaving customers dependent on international supplies.
Its director general, Gareth Stace, said: “The end of steelmaking at British Steel would mean we have a major gap in capacity to meet the future demand of the nation and will be an irreparable break in the armour of national security.”
British Steel argued that despite investment of more than £1.2bn by Jingye since 2020, the Scunthorpe site had run up losses of £700,000 a day. The business now faces the added challenge of the 25% levy imposed on all steel imports to the US by Donald Trump last month.
“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,” the company said.
It set out three options: closure of the blast furnaces, steelmaking operations and Scunthorpe rod mill by early June; closure of the blast furnaces and steelmaking operations in September; or closure in the future.
British Steel’s chief executive, 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.”
Last month the steel unions asked for an extra £200m from the government in support for Scunthorpe to keep the UK’s two remaining blast furnaces open until electric replacements are built.
On Wednesday, Sky News reported that Jingye had rejected a £500m state rescue package offered in a letter sent by the business secretary, Jonathan Reynolds, on Monday.
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Speaking on Thursday, Reynolds acknowledged it was a “deeply worrying time” for Scunthorpe’s steelworkers but insisted there was a “bright future” for the industry.
He said: “I know this will be a deeply worrying time for staff and, while this is British Steel’s decision, we will continue working tirelessly to reach an agreement with the company’s owners to secure its future and protect taxpayers’ money.
“We’ve been clear there’s a bright future for steelmaking in the UK. We’ve committed up to £2.5bn to rebuild the sector and will soon publish a plan for steel setting out how we can achieve a sustainable future for the workforce, industry and local communities.”
The unions Community, GMB and Unite urged the government to act. The Unite national officer Linda McCulloch said: “This is devastating news and there is now a duty on the government to do everything it can to prevent a catastrophic outcome. As the last primary steelmaking facility in the UK, Scunthorpe is a vital strategic asset which we cannot afford to lose.”
Community’s Rickhuss said: “This is a dark day for our steel industry and for our country. We urge Jingye and the UK government to get back around the table to resume negotiations before it is too late.”
“Crucially, Jingye have not ruled out retaining the blast furnaces during a transition to low carbon steelmaking if they can secure the backing of the government.”
