Apr 12, 2025 06:26 AM
(This post was last modified: Apr 12, 2025 06:28 AM by C C.)
Why is British Steel in trouble, who owns it and what will the government do?
https://www.bbc.com/news/articles/c5y66y40kgpo
EXCERPTS: The UK government is poised to take control of a major British Steel plant in Scunthorpe, which is at risk of imminent closure. MPs have been called back from their Easter break to pass an emergency law which would keep the Chinese-owned site operating.
[...] It is the last plant in the UK capable of producing virgin steel, which is used in major construction projects like new buildings and railways. Two huge blast furnaces are used to produce the steel, which has fewer imperfections than the recycled steel made elsewhere in the country.
Were the plant to cease producing virgin steel, then the UK would become the only member of the G7 group of leading economies without the ability to make it - a prospect the government views as a risk to the country's long-term economic security.
Following a period of financial instability, British Steel was taken over by the government's insolvency service in 2019 and then acquired by Chinese steel-making firm Jingye the following year. [...] Jingye says the blast furnaces are no longer sustainable, blaming "highly challenging" market conditions, tariffs and costs associated with transitioning to lower-carbon production techniques.
UK steel production has been falling for several decades and the financial pressures facing the industry were heightened in March when the US imposed a 25% tariff on any steel it imports.
Global over-production of steel has created "a glut of steel on the international market", according to a UK government briefing on the industry, which has pushed prices down. British manufacturers also face higher costs, particularly on electricity, than elsewhere.
[...] The government has told the company's UK management to keep the site operational, and the emergency law will ensure that any employees who are sacked by the Chinese owners can be reinstated.
This intervention stops short of nationalisation - when a government takes ownership and control of a company - but Sir Keir said the government would do "everything possible" to "protect" the UK's steel industry... (MORE - missing details)
https://www.bbc.com/news/articles/c5y66y40kgpo
EXCERPTS: The UK government is poised to take control of a major British Steel plant in Scunthorpe, which is at risk of imminent closure. MPs have been called back from their Easter break to pass an emergency law which would keep the Chinese-owned site operating.
[...] It is the last plant in the UK capable of producing virgin steel, which is used in major construction projects like new buildings and railways. Two huge blast furnaces are used to produce the steel, which has fewer imperfections than the recycled steel made elsewhere in the country.
Were the plant to cease producing virgin steel, then the UK would become the only member of the G7 group of leading economies without the ability to make it - a prospect the government views as a risk to the country's long-term economic security.
Following a period of financial instability, British Steel was taken over by the government's insolvency service in 2019 and then acquired by Chinese steel-making firm Jingye the following year. [...] Jingye says the blast furnaces are no longer sustainable, blaming "highly challenging" market conditions, tariffs and costs associated with transitioning to lower-carbon production techniques.
UK steel production has been falling for several decades and the financial pressures facing the industry were heightened in March when the US imposed a 25% tariff on any steel it imports.
Global over-production of steel has created "a glut of steel on the international market", according to a UK government briefing on the industry, which has pushed prices down. British manufacturers also face higher costs, particularly on electricity, than elsewhere.
[...] The government has told the company's UK management to keep the site operational, and the emergency law will ensure that any employees who are sacked by the Chinese owners can be reinstated.
This intervention stops short of nationalisation - when a government takes ownership and control of a company - but Sir Keir said the government would do "everything possible" to "protect" the UK's steel industry... (MORE - missing details)
