British Steel is at risk of running out of raw materials within weeks, raising fears over the company’s future.
The government is considering nationalising the steel company which has said its two main furnaces are “no longer financially sustainable”, prompting fears the some 2,700 jobs could be lost.
Simon Boyd, managing director of REIDsteel, a British Steel customer, told the BBC that government intervention was the “only solution if we want to keep steel making in the UK”.
He said the firm’s Chinese-owner Jingye only has “days left to secure the order of materials to prevent the forced closure of the blast furnaces over the next month”.
We’re talking days,” he warned.
British Steel, which predominately makes steel for construction, has been owned by Jingye since 2020.
The Chinese company said it has invested more than £1.2bn into British Steel to maintain operations, but claims it has suffered financial losses of about £700,000 a day.
The government has offered £500m of support to partly fund a switch from blast furnaces to more energy efficient electric arc furnaces.
But the move has been rejected by the company.
Electric arc furnaces also do not burn hot enough to make virgin steel, and are fed with scrap steel.
Mr Boyd said Scunthorpe’s current blast furnaces could produce “the highest grade of steel available”.
“If we lose that capability we’ll be wholly reliant on [countries] like China producing the blast furnace steel and you know electric arc furnaces which make steel out of scrap are all well and good but they’re at least five years away,” he told the Today programme.
It is very difficult and very expensive to get blast furnaces running again once they have been turned off, which would make the Scunthorpe site’s existing vulnerability even more perilous.
Mr Boyd added that he was “very encouraged” to hear the government is “finally” considering nationalisation.
Roy Rickhuss, general secretary of the UK’s largest steel workers union Community, told the BBC he agreed with the prime minister that “all options should be on the table and that includes nationalisation”.
“Whatever you decide to do, will come with a cost and if the government own the business then they’ll have to pick up that cost,” he added.
Credit: Source link
