British government refuses to rule out nationalization of last plants that make steel into raw materials in the UK
LONDON (AP) – The UK government has refused to rule out nationalization of the last UK factory, which has increased pressure to maintain the U.S. capacity to provide domestic industries with the steel industry needed as pressure from the global trade war increases.
According to local politicians and unions, unless the government sets on, the Scunthorpe steel factory run by British steel may soon be used to produce iron particles of steel in two huge explosion furnaces. This is because the factory owner, China’s Jingye Group, canceled negotiations on government support for the increase, canceling orders for these basic raw materials.
The news comes two weeks after British Steel said it was considering shutting down explosive furnaces because tariffs and increased environmental costs due to “challenging market conditions” as they are no longer financially sustainable.
The government is continuing to negotiate with Jingye after he rejected a £500 million ($640 million) offer to help modernize the plant. Asked Tuesday that the government was ready to keep the plant open, Prime Minister Keir Starmer said he was “absolutely committed to” steel production in Britain.
“All options are related to Scunthorpe,” he told the parliamentary committee.
British Steel and its predecessors have been manufacturing steel in Scunthorpe for more than 130 years, based on the development of steel manufacturing technology improved during the Industrial Revolution in Britain. The plant currently has about 2,700 employees.
Jingye bought British steel in 2020 and said it has invested more than 1.2 billion pounds ($1.5 billion) to put the plant in the face of “ongoing production instability”.
Since the late 1960s, UK steel production has fallen by 80% nationwide, due to the rapid growth of Chinese output, which has driven global prices.
The UK was the fifth largest steel manufacturer in the world in 1970, producing only 5.6 million tons of steel in 2023, accounting for 0.3% of global production. By comparison, China produces 1.02 billion tons, accounting for 54% of global production.
Now, under the threat of global warming, the remaining steel mills in the UK are under pressure to reduce carbon emissions. Most have been transferred to arc furnaces made of steel from recycled materials.
This makes Scunthorpe the only factory with an explosion furnace that turns iron ore into raw steel.
Union officials say British steel needs to order more iron particles in the next few days to ensure delivery before running out of raw materials in late May.
“We are facing the threat of losing these stoves,” Thomas Smith, an iron worker and representative of the Union Union community, told Sky News this week, adding: “If we miss their deadline, we will have to decide whether to close them all.”
Lawmakers said in a debate in the House of Commons on Monday that Britain needs its own steel industry to maintain its economic independence, an emerging trade war sparked by new import tariffs by U.S. President Donald Trump.
Martin Vickers, a member of parliament representing the area near Scunthorpe, said he believes Jingye is not involved in “meaningful negotiations.”
“I have temporarily considered nationalization the only way,” he said in the House of Commons on Monday. “It will ensure work and ensure the future of Scunthorpe steel production.”
Industry Minister Sarah Jones said Jingye is continuing to talk to the government.
“We have always believed that the best way forward is Scunthorpe and British Steel continue to be a business business as private investment as well as government support,” she said. “But I can tell the glorious gentleman that there is no choice.”
