UK steelmakers line up for support

Steelmakers in the United Kingdom, most of whom operate basic oxygen furnaces (BOFs) and several of which are based outside the country, have reportedly asked for financial help from the U.K. government to keep their furnaces running.

A May 16 online report from Sky News indicates India-based Tata Steel, owner of the Port Talbot integrated steelmaking complex in Wales, is seeking a £500 million ($605 million) government-backed loan.

Integrated producer LIbrety Steel, part of the London-based GFG Alliance, is seeking roughly £250 million ($303 million) in funding, says Sky News. Spain-based Celsa Group, which operates 1.2 million tons per year of electric arc furnace (EAF) capacity in the U.K., “has requested a much smaller sum said to be in the low tens of millions of pounds,” according to Sky.

Most recently, China-based Jingye Group, which purchased the assets of British Steel in March, “is seeking another £100 million ($121 million) of taxpayer support less than three months after completing its takeover of the insolvent Scunthorpe, England-based” British Steel. The Scunthorpe integrated complex dates back to the early 20^th century, and became part of the nationalized British Steel in the 1960s.

Following that, it was part of the Anglo-Dutch Corus steelmaking group, then part of Tata Steel, and then was bought by an investment fund called Greybull Capital in 2016. Greybull was unable to attain consistent profitability with the mill before selling it to China-based Jingye Steel in March.

The May 16 report indicates when Jingye purchased the Scunthorpe assets after Greybull went into insolvency, “A taxpayer indemnity covering the costs of running British Steel during the intervening nine months is understood to have cost in the region of £800 million ($970 million).”