British Steel, the UK's last remaining plant producing virgin steel, has been taken into public ownership after years of uncertainty over its future. The nationalisation, which took effect on 16 July, comes months after the government took control of the Scunthorpe plant, though it was still owned by China's Jingye Group.
The Scunthorpe steelworks, which employs 2,700 people – about three-quarters of the company's workforce – was losing around £700,000 a day, according to Jingye. In late March 2025, the Chinese owner launched a consultation on closure, saying the blast furnaces were 'no longer financially sustainable' due to 'highly challenging' market conditions, tariffs and the costs of moving to lower-carbon production.
“British Steel, the UK's last virgin steel plant, has been nationalised after heavy losses and uncertainty.”
The financial pressures were compounded by the US imposing a 25% tariff on steel imports last March, and a UK government briefing noted that global over-production had created 'a glut of steel on the international market', pushing prices down. British manufacturers also face higher electricity costs than competitors abroad.
A National Audit Office report in March this year revealed the Scunthorpe plant was costing the government about £1.3m a day. The government now says nationalisation will protect jobs and safeguard 'a vital national capability', while keeping the blast furnaces running. However, it is unlikely to remain in charge of the business permanently.
The plant is critical to the UK's economic security – if it stopped producing virgin steel, Britain would be the only G7 member without the ability to make it. Virgin steel is used in major construction projects like buildings and railways, and has fewer imperfections than recycled steel.
British Steel has a turbulent history. In 2016, Tata Steel sold its loss-making 'long products' division – which makes transport rails and steel sections – to private investment firm Greybull Capital for £1, which renamed it British Steel. After financial collapse in 2019, the government's insolvency service took over, before selling it to Jingye the following year.
Now Jingye is seeking compensation for nationalisation, and China's commerce ministry has said it 'firmly opposes and is strongly dissatisfied with the British government's decision'. The government has bought time to decide the plant's future, but the question of who will ultimately run it remains unresolved.
