Last week, UK prime minister Kier Starmer laid out plans to nationalise British Steel, one of the country’s ultimate remaining primary metallic manufacturers. The move comes after the government took control of British Steel’s Scunthorpe steelworks from its Chinese owners Jingye in April 2025, to avoid its blast furnaces from close down.
The UK’s steel manufacturing is the smallest it’s been since the 1930s, following closure of blast furnaces in Port Talbot, Wales, in 2024 and persisting with a long-running trend of surging reliance on imports of cheap steel from China, India and Asia more extensively. As well as accelerating the decline of the UK steel industry, imported steels also can undermine efforts to decrease the environmental effect of steel manufacturing. India is significantly increasing its steel manufacturing, including almost completely coal-fired blast furnaces. The upshot of these integrated pressures was that British Steel was working at a major loss, consequently the proposed shutdown of its furnaces.
UK government’s steel strategy, published at the end of March, goal to target investment in electric arc furnaces to provide ‘circular steel’ from the UK’s abundant scrap steel. The UK produces round 10–11 million tons of scrap steel per year, around 80% of that’s recently exported. Domestic energy prices and other systematic barriers around the infrastructure for sorting and splitting scrap steel have intended that it’s far cheaper to export the scrap and re-import finished steel than process it at home. Jingye had deliberate to install electric arc furnaces at Scunthorpe, however negotiations over government support for the venture fell through.
Industry operations researchers Michael Lewis and Annika Skoglund argue in The Conversation that a successful transition would need the state to take a more active role on numerous fronts, for the reason that supply chain for steel recycling hardly exists within the UK. Reducing energy prices for steel manufacturers and reprocessors, decreasing import quotas (or applyiny higher tariffs to imports to permit UK manufacturers to compete), and enforcing policies that inspire the creation of scrap sorting and processing infrastructure on the same time as building the electrical furnaces that will consume the scrap.
Various aspects of this situation shows same problems across the UK’s basic chemicals landscape. Foundational chemical plants are struggling to survive owing to high energy and regulatory costs integrated with competition from cheaper imports. While the government has sometimes stepping into assist plants such the country’s last remaining ethylene manufacturing plant, many others in less visible industries – which includes the country’s last ammonia and sulfuric acid plants– have not managed to convince the government in their strategic importance and have been permitted to close.
