British Steel may cease production of rolled products in Scunthorpe – Argus

This will happen if the company closes the last operating blast furnace

British Steel’s rolling mills in Scunthorpe may shut down if the company closes the last blast furnace there. This is reported by Argus.Media.

As noted, the rolling lines run on gas captured from the blast furnace. Recent problems with the stability of its operation and subsequent gas shortages have led to some lines operating intermittently. Currently, one blast furnace is operating, powered by raw materials in stock.

According to the source, if the last blast furnace is shut down and semi-finished products are imported, the company will have to modify its heating furnaces to run on a different type of gas.

Without any investment in gas supply, rail production in Scunthorpe will cease. Rail products are one of the most profitable businesses of the company, which is a key supplier to the UK railways.

The transition to single blast furnace operation and the associated problems have already affected the availability of some products. According to the Argus, service centres expect supply through universal channels to be limited in the coming months as the company opts for less unprofitable products.

At the same time, production at the Skinningrove and Teesside plants can continue as both facilities are supplied with gas.

Some market participants are preparing for British Steel’s owner, Jingye Group, to leave the company. According to sources, executives of the British unit and local politicians are visiting China to hold talks with the latter. In addition, it is noted that the weakness of the Chinese market in recent months will affect Jingye financially, as it does everyone else.

A British Steel spokesperson declined to comment on ‘hypotheticals’. According to him, the company is in ongoing discussions with the government on decarbonisation plans and the future of its UK business. Negotiations are progressing, but no final decisions have been made.

In June 2024, British Steel applied for a £600 million government support package. The plans outline the costs of switching from blast furnaces to electric arc furnaces at the company’s steel plants in Scunthorpe and Teesside.

As GMK Center reported earlier, on 12 September, the UK government confirmed the allocation of £500 million to support Tata Steel’s Port Talbot plant, announcing that a new and improved agreement had been reached. The funds will be used to build electric arc furnaces at the plant. In July, the company shut down blast furnace No. 5 at the plant, while BF No. 4 will remain in operation until the end of September.