The British government moved quickly on Saturday, and it seemed like a major step towards nationalizing the factories, managing operations at the country's last large oil production facility.
In an unusual and dramatic move, the government summoned lawmakers from Saturday's holiday to approve the government's emergency law.
The government said the owner of Scunthorpe's British Steel Complex, a Chinese company called Jingye, could take unilateral steps to unilaterally close the vessels, potentially at the expense of 2,700 jobs.
“Iron is the basis of the UK's industrial power, our security and our identity as a major global power,” said Jonathan Reynolds, Secretary of Business and Commerce, introduced legislation into Parliament on Saturday.
Currently, despite interest in preserving steel manufacturing, it has long declined in the UK. According to UK Steel, a trade group, crude steel production has fallen by about 50% over the past decade.
UK industry struggles with high energy costs and competition, not only mainly from China, but also high energy costs, and now accounts for more than half of all global steel.
The 25% tariffs that President Trump recently imposed on steel imported into the US added an additional hurdle.
In this challenging environment, Kiel's government risks sticking to supporting businesses that its owners say are currently losing £700,000 or about $915,000 a day.
The government has argued that it is not nationalizing UK steel, but it has argued for board and management control, and appears to be responsible for running costs.
Amidst the increasingly bitter tone of the conflict, the government said Friday that employees who were fired for “violating orders from Chinese owners” could be resurrected.
The government says it wants to find partners to invest in greener steel manufacturing processes, but critics say these moves are equivalent to nationalisation.
“This is a failed nationalization plan,” warned Andrew Griffith, a business spokesman for the Conservative Party of Opposition.
It appears that various motivations lie behind Hoshi's approach.
He was wary of closing big plants at the expense of thousands of jobs from union supporters.
Last year, Tata Steel, a large India-based company, closed many of the UK's other large steel factories in Port Talbot, Wales, leading to major unemployment.
“We've had great concern and a lot of anger about it,” said Alasdair McDiarmid, assistant secretary of the Community Coalition, representing many steel workers.
In the growing world of economic nationalism, Starmer appears to have embraced the argument that it is important to maintain the domestic capacity to make what is known as virgin steel.
A British steel factory in Scunthorpe, northeastern England, features two British contrast furnaces, with a huge chamber that uses iron ore and cola, derivatives of coal to produce molten metals. Other factories then finish crude steel on products such as railway ties and beams for the construction industry.
The pressure to keep Scunthorpe open appears to have increased in the wake of the Trump administration's signal. This was less committed to European security than the previous US administration. President Trump's tariffs were clearly part of that calculation.
“Given global economic instability, it's important that manufacturing is protected at home,” the government said Friday.
Reynolds said he made what he made a “generous” offer of assistance to Ginsey. This proposed shifting the production of Sukhunthorpe to electric furnaces that make steel by melting scrap metal.
Explosion furnaces like Scunthorpe not only produce high-quality steel, but also emit emissions, and many European steel companies are considering converting them to other technologies.
Reynolds told lawmakers that Jingie wanted what he called “an excessive amount of government support.” The cost of converting to an electric furnace was estimated to be over £2 billion.
He also said that recently it appears that Jingye is trying to close and force explosion furnaces of raw materials like Coke to starve them. “The company would therefore irreparably unilaterally shut down primary steel production,” he said.
A spokesman for British Steel declined to comment. The company said in a news release last month that it had invested £1.2 billion in British Steel since taking over it in 2020.
