Why has British Steel been nationalised?

An important development from the financial markets: Why has British Steel been nationalised? Image source, Getty ImagesByJennifer Meierhans and Shanaz Musafer, Business reportersPublished11 April 2025Updated 4 minutes agoBritish Steel has been taken into public ownership after years of uncertainty over the future of the steelworks. It comes months after the UK government took control of the company's plant in Scunthorpe, Lincolnshire, though it was still owned by China's Jingye Group.

What is British Steel and why is it important? British Steel's Scunthorpe plant employs 2,700 people, about three-quarters of the company's workforce. It is the last plant in the UK producing virgin steel, which is used in major construction projects like buildings and railways.

Economic Details

It has fewer imperfections than the recycled steel made elsewhere in the country. Were the plant to stop producing virgin steel, the UK would be the only member of the G7 group of leading economies without the ability to make it. The government views that as a risk to the UK's economic security.

British Steel to get supplies to keep furnaces burningUK takes control of British Steel under emergency powersWhy was British Steel Chinese-owned? In 2016, Tata Steel sold the loss-making part of its business that made "long products" like transport rails and steel sections for construction. Private investment firm Greybull Capital bought it for £1 and renamed the business British Steel.

However, following financial collapse in 2019, British Steel was taken over by the government's insolvency service. It was sold to Chinese steel-making firm Jingye the following year. Jingye is now seeking compensation for nationalisation, having previously said the business was losing £700,000 a day.

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China's commerce ministry has hit out at the nationalisation, saying it "firmly opposes and is strongly dissatisfied with the British government's decision". Why is the Scunthorpe plant losing money? In late March 2025, Jingye said the plant was losing around £700,000 a day and launched a consultation on its closure.

It said the blast furnaces were "no longer financially sustainable," blaming "highly challenging" market conditions, tariffs and costs associated with moving to lower-carbon production techniques. A later report from the National Audit Office in March this year noted that the Scunthorpe steelworks was costing the government about £1. UK steel production has been falling for several decades and the financial pressures facing the industry were heightened last March when the US imposed a 25% tariff on any steel it imports.

Global over-production has created "a glut of steel on the international market", according to a UK government briefing,, external which has pushed prices down. British manufacturers also face higher costs, particularly on electricity, than firms in other countries. What has the government said?

Financial markets are tracking the development closely as investors assess the likely impact.