China-owned British Steel said it could close its two blast furnaces as soon as June with the potential loss of up to 2,700 jobs, as US tariffs and environmental costs threaten to damage its already struggling operations.
British Steel, owned by China's Jingye Group, has warned for years that steel-making in Scunthorpe, north east England, is loss making.
It said today that it would consult over the closure of its blast furnaces and other related operations.
"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," British Steel said in a statement today.
US President Donald Trump imposed global tariffs of 25% on all imports of steel on March 12, dealing another blow to British Steel, which said its Scunthorpe operations are losing £700,000 daily.
Britain's steel exports to the US are worth over £400m a year, or about 5% of UK steel exports, according to industry body UK Steel.
British Steel, which has been making steel since 1890, said it was beginning consultations with unions and the proposed closures could impact between 2,000 and 2,700 jobs - subject to consultations - with June the earliest possible date for closure.
The company has been in talks with the UK government for months over a funding package to help it replace the blast furnaces with electric arc furnaces, a greener type of steel production, but the two sides have not reached an agreement.
"We made an offer to British Steel on Monday and they have rejected that offer. We are still in talks with them at the moment," Sarah Jones, a minister in the Department for Business and Trade said yesterday.
British Steel said it would continue working with the UK government to explore options for the business.
