Liberty Steel bids for whole of British Steel

Liberty Steel has bid for British Steel in its entirety, including the steel production and sections mills.

The only part of the business Liberty has not bid for is TSP Projects, which two French companies are interested in acquiring.

JSW and a Chinese mill have also submitted bids for the whole company, according to market chatter.

Liberty sources slab for its Scottish plate mills from British Steel, and also occasionally for its coil mill in Newport, south Wales.

Liberty has been a big proponent of electric arc furnace (EAF) production in the UK, and has planned to install at least one EAF at its site in Newport.

Community Union, which represents steelworkers, favours a sale of the whole British Steel business, rather than piecemeal. But there is an expectation that the successful bidder, should it acquire the whole business, will make changes going forward.

The main change could be a move from carbon-intensive blast furnace-based production to an EAF. The Scunthorpe site has four blast furnaces, known locally as the “Four Queens”, but typically only operates two at a time.

Given the rising cost of carbon, and the comparative expense of imported iron ore and coking coal — at least at current spot prices — using the UK’s reservoir of domestic scrap makes sense.

Participants question the profitability of the sections mills, particularly Lackenby, which is some distance from the Scunthorpe semi-finished production site, and therefore logistically inefficient.