Up to 2,700 jobs are at risk at British Steel’s Scunthorpe steelworks after its Chinese owner, Jingye Group, announced plans to shut down the site’s two remaining blast furnaces and scale back rolling mill operations.
The decision marks a major blow to the UK’s industrial heartlands and follows the rejection of a £500 million state support package. British Steel, the UK’s second-largest steelmaker, cited mounting financial pressures, high environmental costs and the ongoing impact of Trump-era tariffs as the reasons behind the move.
In a statement, the company said: “Challenging market conditions and significant ongoing financial losses have made it unsustainable to continue operating the blast furnaces and wider steelmaking operations.”
British Steel has entered a consultation process with its 3,200-strong workforce and trade unions to determine the scale of redundancies. The closures are expected to result in job losses ranging from 2,000 to 2,700, depending on how the plans progress.
Chief executive Zengwei An described the announcement as “an extremely difficult day for our staff, their families and everyone associated with British Steel,” but added that “this is a necessary decision, given the hugely challenging circumstances the business faces.”
Steelmaking at Scunthorpe dates back to the 1890s, and the site plays a vital role in UK infrastructure projects — particularly in providing rail track and structural steel for construction. However, the site has faced mounting challenges in recent years.
Jingye, which acquired British Steel in 2020 following the collapse of previous owner Greybull Capital, said it had invested £1.2 billion into the business over five years. Still, it claims the company is losing £700,000 a day — or £250 million a year — due to “ongoing production instability and significant financial losses.”
The company insists it has been in lengthy negotiations with the UK government to secure financial backing for a transition to cleaner electric arc furnace technology, similar to the plans already in motion at Tata Steel’s Port Talbot site. However, talks have failed to reach agreement. Jingye has reportedly been seeking over £1 billion in state support to make the switch.
“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.
The trade and tariff environment has further complicated matters. Allan Bell, British Steel’s chief commercial officer, recently told MPs that the company was losing export business due to cancelled US contracts and warned of the risks of cheap foreign steel flooding the UK market as a result of trade diversions caused by US protectionism.
“The indirect impact of potential diversion of steel originally bound for the US market into the open market is our biggest concern,” he said.
Trade unions are now urging the government to step in and safeguard Scunthorpe’s future, branding it a nationally strategic asset. There have been growing calls for the UK to take a more proactive approach to preserving key industrial capabilities in the face of foreign ownership and global market volatility.
The news follows a broader trend of upheaval in the UK’s steel sector, with Tata Steel also cutting 2,500 jobs at Port Talbot in its shift to electric arc furnaces.
Without a breakthrough in talks or a new support package, the Scunthorpe closures could mark the end of traditional steelmaking at one of Britain’s most historic and strategically important industrial sites.
