Commentary
British Steel is a strategic company in the UK, as it has the country’s last two blast furnaces capable of making new steel. Without the ability to make this virgin steel, the UK would be at a disadvantage in an emergency such as a war. Ships, planes, and tanks need a reliable source of steel, especially when international trade may be blocked.
Yet the UK government invited a Chinese company, Jingye, to buy British Steel in 2020. After claiming that the company had lost money, Jingye reportedly moved to shutter its furnaces. One fewer foreign steel company in the world would help China gain international control over the sector.
UK Secretary of State for Business and Trade Jonathan Reynolds said during a debate in the UK Parliament on April 12 that Jingye intended “to cancel and refuse to pay for existing orders” of the coke coal and iron ore necessary to keep the furnaces operational. Had they gone cool, it would have “irrevocably and unilaterally closed down primary steelmaking at British Steel,” he said. This would have threatened as many as 3,500 British Steel jobs and the independent ability of the UK to make steel from coke coal and iron ore.
In 1934, the UK steel industry was a multitude of private companies. That year, they combined, forming the British Iron and Steel Federation to jointly negotiate with their international suppliers and customers. The industry was nationalized in 1949 and denationalized in 1953. In 1967, the UK government nationalized 14 steel companies into one company: British Steel.
The company’s subsidiaries were not only in the UK, but also in Africa, Australia, Canada, New Zealand, South America, and South Asia. In 1988, the government under Prime Minister Margaret Thatcher privatized British Steel, which had become profitable. However, these profits turned to losses over the years. The owner of British Steel before Jingye, Greybull Capital, walked away from the investment in 2019.
This is when the UK government approached Jingye to purchase British Steel, which it did in 2020. Jingye promised to invest £1.2 billion ($1.6 billion). However, British Steel proceeded to lose another £350 million ($467 million) before Jingye said in March 2025 that it planned to shut the old furnaces. By then, Jingye estimated that the plant had lost approximately £700,000 ($933,000) per day. The UK government offered £500 million ($667 million) of the £2 billion ($2.7 billion) necessary to modernize the furnaces with electric arc technology to decrease emissions. But Jingye rejected the plan, wanting £1 billion ($1.3 billion) instead.
On April 12, the UK government passed emergency legislation to take over management of British Steel after Jingye apparently threatened to shut down the blast furnaces within days. After the takeover, UK police reportedly barred Jingye staff from entering.
Reynolds alleged that by moving to shutter the furnaces, Jingye had not acted in good faith. Reynolds said the UK “got it wrong in the past” by selling to a Chinese company, noting the influence that the regime in Beijing has over supposedly private companies in China. He said the UK government had been “far too naive” about UK–China trade.
Given that it will be difficult to find a buyer, the company will likely be renationalized. There is support for nationalizing steel on both sides of the UK political spectrum. Nigel Farage’s Reform UK Party has long called for British Steel to be fully nationalized. Jeremy Corbyn, the former Labour Party leader, wants to nationalize all steel in the UK. Those resistant to this path have cited concerns about many other privatized UK industries that are in distress, including electricity, water, and railway companies. Even the postal service is private in the UK.
The Chinese Embassy in the UK is predictably frosty about the government takeover of British Steel.
“Any words or deeds that politicise or maliciously hype up business issues will undermine the confidence of Chinese business investors in the UK and damage China-UK economic and trade cooperation,” the embassy wrote.
After nationalization, which could involve a payment of as little as nothing because of the company’s annual losses, those losses will be borne by the UK taxpayer. But this will be made up for in taxes on the plant and the incomes of the workers and, above all, in national security benefits. The UK only produces about 0.3 percent of global steel output, but this is enough to give it a critical level of independence in terms of this strategic commodity. All Group of Seven nations have that capability. All countries that want industrial independence in case of an emergency should have that capability.
Without it, the UK would be dependent upon steel manufacturers in other countries, including China. As China is allied with Russia, and Russia is obliquely threatening war against European countries, it is unwise to rely on China for steel imports. Likewise, it was unwise to rely on a Chinese company, likely controlled by the Chinese Communist Party (CCP), to run a steel company in the UK.The CCP is anti-democracy and anti-UK. The Opium Wars of the 19th century are regularly trotted out by Beijing to try to make the UK look bad. It is time for London to further disengage from Beijing. Fully renationalizing British Steel would be a great first step.
