British Steel plans to close Scunthorpe blast furnaces, putting up to 2,700 jobs at risk

British Steel plans to close its two blast furnaces and steelmaking operations in Scunthorpe, in a move that puts up to 2,700 jobs at risk and that unions described as “devastating”.

British Steel, 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.

The company 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 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.

The steel unions Community, GMB and Unite urged the government to act.

Community’s general secretary, Roy 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.

“The closures at Scunthorpe would represent a hammer blow to communities which were built on steel, and where the industry still supports thousands of jobs directly and thousands more through extensive supply chains.”

He 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”.

Linda McCulloch, Unite’s national officer, 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. The government has set aside £2.5bn for the steel industry and ministers should consider deploying that funding now before it is too late.”