British Steel has announced a formal consultation that could lead to the closure of its two blast furnaces and steelmaking operations in Scunthorpe, placing up to 2,700 jobs at risk from its 3,500-strong workforce. The plan also includes a potential reduction in rolling mill capacity as the company faces mounting financial and operational challenges.
Since acquiring the business in 2020, Chinese owner Jingye Group has invested over GBP1.2 bln (USD 1.54 bln) to sustain operations amid persistent losses and market instability. This includes more than GBP300 mln (USD 387 mln) directed toward key capital projects such as a modern mast service centre in Skinningrove, a rail stocking facility, and a new billet caster.
Despite these investments, British Steel says that continuing to operate the blast furnaces and traditional steelmaking facilities is no longer financially sustainable. The company cites weak market conditions, rising environmental costs linked to high-carbon steel production, and the imposition of trade tariffs as key factors behind the decision.
British Steel had sought around GBP1 bln (USD 1.29 bln) in government funding to help transition to a greener model using Electric Arc Furnaces (EAF), but reportedly received an offer of just GBP500 mln. After months of negotiations with no agreement reached, the company is moving forward with consultation.
The process, which begins on 27 March 2025, will consider three possible timelines: closing the blast furnaces, steelmaking operations, and the Scunthorpe Rod Mill by early June; delaying closure until September; or extending operations beyond that point. British Steel says it remains committed to working with the UK government to explore solutions for the future of the business.
1 USD / 0.77 GBP