British Steel mulls building two electric arc furnaces at Scunthorpe site
British Steel is continuing its discussions with the UK government regarding the company’s decarbonization plans and the future operations of its UK business, a company spokesperson told S&P Global Commodity on Jan. 13.
While the company did not provide additional details, local media sources familiar with government discussions indicated that the initial plans, which envisioned building one electric arc furnace at Scunthorpe and another at Teesside, have been scrapped in favor of constructing the two furnaces at the Scunthorpe, north Lincolnshire site.
British Steel was nationalized in 2019 while the government sought buyers. It was subsequently sold to the Chinese steelmaker, The Jingye Group, which pledged a GBP1.25 billion ($1.55 billion) decarbonization plan. Under the proposed plan, the company was aiming to install two electric arc furnaces—one at its headquarters in Scunthorpe and the other at its manufacturing site in Teesside.
“While progress continues, no final decisions have been made,” the company spokesperson said.
“We’re working across government in partnership with trade unions and businesses, including British Steel, to secure a green steel transition that’s right for the workforce, represents a good investment for taxpayers, and safeguards the future of the steel industry in Britain,” a spokesperson from the Department for Business and Trade said to S&P Global when reached for a comment on Jan. 13, underscoring the government’s commitment to preventing the end of steelmaking in the UK, with up to GBP2.5 billion of investment for the UK steel industry.
Currently, British Steel operates two furnaces: the Queen Anne Blast Furnace and the Queen Bess Furnace. The Queen Anne Blast Furnace was temporarily offline due to operational issues but resumed operations in late December.
British Steel’s plant in Scunthorpe is the only steelmaker in the UK that still produces crude steel after Tata Steel closed all its blast furnaces at Port Talbot in South Wales, securing Eur500 million in funds for its low-carbon transition to build its Electric Arc Furnace.
The company has been working with the government for months to secure funding for the relaunch of the site and to begin the transition from blast furnace production to electric arc furnace production, with the first EAF expected to become operational by late 2025. This would replace the 3 million mt/year blast furnaces responsible for the vast majority of the company’s CO2 emissions.
Platts, part of S&P Global Commodity Insights, assessed Hot Rolled Coil weekly (HRC) DDP West Midlands at GBP520/mt on Jan 9.
Cleveland-Cliffs CEO continues quest to acquire US Steel
In the meantime,Cleveland-Cliffs will be headed downstream to capitalize on its dominance of the grain-oriented electrical steel market.
Goncalves held a press conference on Monday January 13 at the company’s Butler Works in Butler, Pennsylvania, to stress the role that Cleveland-Cliffs should play on the national security front.
Safeguarding national security was ultimately the argument used by President Joe Biden to block the hotly contested $14.9-billion purchase of US Steel by Japan’s Nippon Steel. Cleveland-Cliffs had been a rival bidder, ultimately being outbid by a single dollar per share.
Gonçalves stressed to the audience on Monday that the question of whether he would have another chance at US Steel was a “when” question, as opposed to “if.”
“I want to buy. I have a plan. I have an all-American solution in place,” he said. “I know we can make American steel great again.”
To take that shot, however, US Steel must formally abandon its merger agreement with Nippon Steel. The company has been granted an extension to appeal Biden’s decision, through June 18.
Goncalves declined to comment on the dollar-value of any offer Cleveland-Cliffs might make, and he likewise declined to discuss potential partners or asset-carve out agreements. He said that if Cleveland-Cliffs were to buy US Steel, he would personally move to Pittsburgh, Pennsylvania; keep the company’s headquarters in Pittsburgh; and christen the steelmaking portion of Cleveland-Cliffs’ business “United States Steel,” while the iron ore portion would retain the Cleveland-Cliffs brand.
It had been reported by mainstream news outlets earlier in the day that one potential path for the acquisition could be an all-cash deal for US Steel, immediately followed by the sale of its electric-arc furnace (EAF) jewel Big River Steel to competitor Nucor.
Weirton reimagined
Throughout the press conference, Gonçalves referenced the company’s former tinplate works in Weirton, West Virginia, which was shuttered in February.
In July, Cleveland-Cliffs committed to spending at least $150 million to reopen Weirton as a captive transformer production facility, using the company’s grain-oriented electrical steel (GOES).
The company inherited the GOES-making capabilities of AK Steel when it acquired the latter five years ago. Former AK competitor Allegheny Technologies Inc no longer produces GOES.
Cleveland-Cliffs is currently in the process of buying equipment for the Weirton project. Start-up is slated for early 2026.
“You can’t have a country that’s not able to make the steel that goes in a transformer,” Gonçalves said.
