U.K. Nationalizes British Steel, Angers China

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

Summary

The U.K. government has passed laws that will allow it to take control of struggling British Steel from its Chinese owners, Jingye Group.

British Steel Taken from Chinese Owners

The U.K.'s second-largest steel producer, British Steel, will be nationalized following the passing of new laws by the government. 

Powers to nationalise the steel industry have been passed, clearing the way for British Steel to be brought under public ownership. The main Scunthorpe plant employs 2,700 people, about three-quarters of the company's workforce. The Act allows the government to nationalise steel companies "where it's necessary in the public interest, to protect a foundation industry that supports our critical national infrastructure, economy and defence." China has reacted angrily to the move, which follows on from the government seizing control of the company from Jingye Group in April 2025 after the Chinese company was planning to shut down the smelters. 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  four major projects at the main Scunthorpe steelworks that are currently on hold, worth almost US$570 million in investment. 

The Government Take

"British Steel is one of the nation's biggest steel producers, and I've made the decision to nationalise the business to secure steelmaking capability and maintain production in the national interest," said U.K. Business Secretary Peter Kyle. "British Steel now belongs to the British people, and our focus is on the future: stabilising the business, backing the communities that rely on it and building a sustainable, competitive and decarbonised steel sector for the years ahead." Interim British Steel Chief Executive Officer Allan Bell added: This is a momentous day for British Steel. It  is an historic day for Britain and U.K. manufacturing -- one which safeguards our future and strengthens national security and infrastructure. We are grateful to the UK Government for the decisive action it has taken, and the support it has given our business -- and our people -- during such a challenging period."

China's Reaction

"We hope the British government treats Chinese enterprises investing and operating in the U.K. fairly and justly, protects their legitimate rights and interests, and avoids politicizing and over-securitizing economic and trade cooperation, so as not to affect the confidence of Chinese enterprises in investing and cooperating in the U.K.," said China's Foreign Ministry spokesman Lin Jian. Former owner Jingye is now seeking compensation from the U.K. government, calling the seizure "outright robbery" and accusing ministers of "trampling on international investment rules" in a statement released on WeChat. "The U.K. disregarded Jingye's continuous investment and significant contribution and was only willing to provide almost zero compensation." The Government said it will carry out an independent evaluation to determine whether any compensation will be paid to Jingye. 

The U.K. Steel Strategy

The government has had to actively intervene on a number of occasions to save the biggest smelters in recent years. In 2023, Tata Steel U.K. received a £500 million (US$672 million) rescue package from the U.K. government after protracted negotiations. A similar deal was offered to Jingye but was rejected. In March, the government took action to secure the future for its troubled steel sector. It introduced 50% tariffs on steel imports in an effort to protect the industry as part of its Steel Strategy. It also set 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. 

The Steel Strategy commits to: 

• Confirm electric arc furnaces (EAF) as the future of British steelmaking, continuing the shift from blast furnaces to cleaner, EAF-based production using recycled scrap to support net-zero emissions. 
• Enable offshore wind developers to include steel manufacturers in the next round of Clean Industry Bonus applications (launching this year) to maximise U.K. steel use in renewables. 
• Launch a cross-government working group to ensure a sustainable supply of scrap metal for U.K. steelmakers. 
• Task the Steel Council with action on workforce needs and practical research and innovation to boost productivity and competitiveness. 
• Alongside the new trade measure being announced today, the Government will also be raising the U.K.'s maximum Most Favoured Nation (MFN) steel tariffs at the WTO to 50% to protect domestic industry in the long run from the impacts of global overcapacity. 

Key Takeaways

• The U.K. has passed laws to nationalise British Steel. 
• China's Jingye Group called the plant seizure "outright robbery" and wants compensation. 
• Industrial Info Resources is tracking four major projects at the main Scunthorpe steelworks worth almost US$570 million in investment. 

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).