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Tariff-hit British Steel confirms plan to shut blast furnaces
Chinese-owned British Steel confirmed Thursday plans to shut blast furnaces and other operations in England, saying US President Donald Trump's tariffs on the sector were partly to blame for a decision which could cost up to 2,700 jobs.
The company said in a statement that "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".
People close to the matter told AFP that between "2,000 and 2,700" jobs could be lost at British Steel's main UK site in Scunthorpe, northern England, as a result of the shutdowns which were first proposed in late 2023.
British Steel, owned by Chinese group Jingye, said it currently employs about 3,500 staff in the UK.
The company added that it would "consult on the closure of its two blast furnaces, steelmaking operations and a reduction of steel rolling mill capacity in Scunthorpe".
Trump has slapped 25-percent tariffs on imports of steel and aluminium, raising fears of the knock-on effects for Europe's beleaguered steel industry facing fierce competition from Asia.
Britain, home also to steel operations owned by Indian group Tata, exports about 10 percent of its produced metal to the United States.
- Government deal -
British Steel added Thursday that it had failed to reach agreement with the UK government on a financial package to "limit the impact" of the operational changes and to help transition from coal-powered blast furnaces to electric arc furnace (EAF) technology producing "greener" steel.
Shortly after its update, Minister for Industry Sarah Jones told parliament "it is regrettable" that British Steel had rejected an offer from the Labour government.
People close to the matter said the offer was worth £500 million ($647 million) on a required total investment "in excess of £2 billion".
Business Secretary Jonathan Reynolds said the government was continuing discussions with its Chinese owners.
"I know this will be a deeply worrying time for staff and, while this is British Steel's decision, we will continue working tirelessly to reach an agreement with the company's owners to secure its future and protect taxpayers' money," he added.
British Prime Minister Keir Starmer recently announced that the government was stumping up some £2.5 billion to help support the sector.
"We'll be publishing a plan for steel, setting out how we achieve a sustainable future for the industry and local communities," Starmer's spokesman said Thursday.
Roy Rickhuss, general secretary at the Community union, said British Steel's announcement was "a dark day for our steel industry and for our country.
"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," he added.
P.Mathewson--AMWN