U.K Plan to Nationalize British Steel Angers China

Written by Martin Lynch, European News Editor for IIR News Intelligence (Sugar Land, Texas)

Summary

The U.K. has announced a plan to nationalise one of its few remaining steel producers, British Steel, having previously taken control of the company away from Chinese company Jingye. 

China has warned of repercussions for the U.K. if it follows through on a government plan to nationalize one of its remaining steel manufacturers, British Steel.

Taking Back British Steel

The Steel Industry (Nationalisation) Bill was introduced to Parliament last week, and will allow the government to bring steel companies, such as British Steel, into public ownership "where this is necessary and when a public interest test is met." It comes just over a year after the government seized control of British Steel's Scunthorpe steelworks from its Chinese owners Jingye in order to halt the potential closure of its blast furnaces. At the time, the government said it would have "disrupted supply chains and risked thousands of jobs". British Steel is the third largest steelmaker in the country and the latest to need significant government intervention to survive. For additional information, see April 15, 2025, article--U.K. Seizes Control of Chinese-owned British Steel. According to Industrial Info Resources data, there are three active projects at the Scunthorpe steelworks, including the proposed installation of an electric arc furnace (EAF), worth more than US$550 million. Subscribers to Industrial Info Resources' Global Market Intelligence (GMI) Project Database can click here for the reports. 

Government Take

Prime Minister Keir Starmer said: "Steel is strategically important to our economy and our national resilience. That's why we acted last year to avoid a sudden halt to production at Scunthorpe, protecting workers and the community that depend on the site, and why we're now bringing forward legislation to give us options to protect Britain's steelmaking capability. This is what an activist state looks like -- taking decisions in the national interest. This Bill would allow us to take action if we need to, while we continue rebuilding our steel sector."

China's Reaction

China's commerce ministry responded by telling the U.K. government to "respect the wishes of firms ‌and market principles and avoid the abuse of administrative coercive measures and actively seek a fair, just solution acceptable to both sides". It warned that it will "take strong ⁠measures to safeguard legitimate rights of Chinese companies". The government and Jingye have so far failed to negotiate any kind of financial deal over the past two years. Just weeks prior to the government taking control of the steelworks, Jingye had rejected a £500 million (US$670 million) rescue package to help overhaul and modernize the operations. For additional information, see April 8, 2025, article - British Steel Rejects $646 Million Rescue Offer from U.K.

U.K. Steel Strategy 

Earlier this year the government introduced new 50% tariffs on steel imports in an effort to protect its struggling steel industry. Its Steel Strategy outlined a number of key measures, including the "ambition" for up to 50% of steel used in the U.K. to be made in the U.K., up from around 30% today. It also confirmed that electric arc furnaces (EAF) were the future of British steelmaking and that it would continue to support the shift from blast furnaces and work to ensure a suitable supply of scrap for the industry. For additional information, see March 31, 2025, article - U.K. Hikes Steel Tariffs to 50%. Industrial Info Resources is tracking a £1.25 billion (US$1.7 billion) project to transform the U.K.'s largest steelworks, Port Talbot, into a green steel operation that Tata Steel U.K. claims will reduce the site's carbon emissions by about 90%. Tata will move ahead with the closure of two blast furnaces at the site, where the company employs 4,000 people. Around 2,800 jobs will be lost in the transition. Industrial Info is tracking five Port Talbot projects worth more than US$2 billion in investment. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the reports.

Key Takeaways

• U.K. government plans to nationalize British Steel, owned by Chinese firm Jingye, has sparked warnings from China's government.  
• The plant was put under government control a year ago to prevent Jingye from shutting down its loss-making blast furnaces.
• Jingye had previously rejected a government £500 million (US$646 million) rescue package to help overhaul and modernize the operations.

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).