Flacks Group mulls British Steel acquisition
The Flacks Group, a United States-based investment firm focused on the turnaround of distressed businesses, is considering the acquisition of troubled UK steelmaker British Steel, CEO Michael Flacks told McCloskey on 3 February.
Flacks Group is in the early stages of the potential purchase with no agreement achieved with the UK authorities yet.
In April 2025, when British Steel faced the possibility of complete closure, the UK government intervened, taking direct control of its operations. The UK government is now focused on keeping the Scunthorpe and Teesside sites operating, securing raw material supplies, and reviewing previously proposed decarbonisation plans.
Flacks Group plans to replace the existing blast furnaces (BFs) and basic oxygen furnaces (BOFs) at British Steel with electric-arc furnaces, achieving a significant reduction in CO2 emissions.
The plans are in line with the project initially proposed by China’s Jingye Group, the company in control of British Steel before the state intervention. It had planned to install one EAF at the Scunthorpe site, closing its BF/BOF operations, and another EAF at the Teesside rolling mill.
The Scunthorpe site operates two BFs with a combined installed capacity of approximately 3 mt/y. The other two remain inactive.
Late last year Flacks Group emerged as the preferred bidder for Italian steelmaker Acciaierie d’Italia (ADI). The company plans to double steel output at ADI to 4 mt within one year. As part of the decarbonisation initiative Flacks Group plans to replace existing BFs with two EAFs and keep only one BF running.
Michael Flacks said he expects the ADI deal will be approved by the end of April this year.
The UK government is preparing to take over its third-largest steel plant
According to a court announcement, new administrators have been appointed to take control of Speciality Steels UK (SSUK), a Liberty Steel-owned facility in South Yorkshire. The company, which produces steel using scrap metal, has faced ongoing uncertainty due to its mounting unpaid debts, putting it at risk of liquidation.
This development comes after the government earlier this year took control of the British Steel plant in Scunthorpe to prevent the closure of the country’s last remaining primary steel production facility. SSUK hosts the UK’s largest electric arc furnace, known for its greater energy efficiency and expected to play a key role in the steel industry’s energy transition.
However, the company has long struggled with financial difficulties. The collapse of Liberty Steel’s main lending institution and growing unpaid debts have made it impossible for the company to purchase the scrap metal needed for steel production.
The fate of SSUK now rests with a judge in the High Court. Lawyers for Sanjeev Gupta, chairman of Liberty Steel’s owner GFG Alliance, warned that a potential liquidation order could spell the end of steel production at the plant. Gupta’s legal team has requested a postponement to allow the administrative process to be completed and argued this would avoid the need for direct government intervention.
Creditors’ lawyers, however, submitted a letter from the government to the court, providing assurances that the steelworks could be taken over if necessary. Creditors, who are owed hundreds of millions of pounds, have petitioned the court to force the company into liquidation so its assets can be sold to repay debts.
GFG Alliance, which operates in the energy, trade, and steel sectors and employs thousands across the UK, has been under scrutiny since the 2021 collapse of its main lender, Greensill Capital. Sources close to Gupta have confirmed ongoing talks with investment giant Blackrock to provide new funding to acquire the company through a managed process known as a “pre-pack” administration.
While the government supports policies to back the steel sector, it has repeatedly rejected direct financial aid requests from Sanjeev Gupta. As a result, two difficult options lie ahead: allowing Gupta to retain control of the company, which would likely see much of the creditors’ debts written off but avoid costs to the government; or the government taking over the loss-making steelworks to ensure creditors are paid, a process that could be both costly and lengthy.
In a statement, the government emphasized: “We will continue to closely monitor developments regarding Liberty Steel, including public hearings. We support the appointment of an Official Receiver to take necessary action should the company enter compulsory liquidation.”
Liberty Steel responded, saying, “Our commercial solution, supported by major private equity, will deliver the best outcome for the company, employees, and all stakeholders, without costing UK taxpayers or causing unnecessary uncertainty.”
British Steel supplies steel for cable factory in Scotland
UK-based steelmaker British Steel has announced that it has played a pivotal role in constructing one of Scotland’s most significant renewable energy infrastructure projects – a £350 million subsea cable factory at the Port of Nigg, operated by Sumitomo Electric U.K. Power Cables Ltd.
UK-based steelmaker British Steel has announced that it has played a pivotal role in constructing one of Scotland’s most significant renewable energy infrastructure projects – a £350 million subsea cable factory at the Port of Nigg, operated by Sumitomo Electric U.K. Power Cables Ltd.
The company has supplied over 2,000 mt of structural steel sections for the facility, which will produce high-voltage subsea power cables critical for offshore wind farms and grid connections.
Construction progress and scope
The project is well underway, with steelwork installation for the first of four planned buildings already in progress. The fabrication and erection of the steel structure are being carried out by the UK-based subcontractor BHC, which also handles metal decking, concrete topping, cladding, and intumescent fire protection coatings before delivery to the site.
Once completed, the factory, due to open in 2026, is expected to create around 330 jobs across the entire supply chain, significantly boosting the Scottish Highlands economy.
British Steel negotiations at standstill as UK rejects Jingye’s multi-million demands
According to a news report by the BBC, the UK government’s talks with China-based Jingye Group, the owner of the UK-based steelmaker British Steel, have reached a critical impasse over the Scunthorpe steelworks.
Ministers accuse Jingye of demanding “hundreds of millions” in taxpayer money to transfer ownership – a sum they say is far above the company’s real value. The deadlock has stalled efforts to secure a new buyer and raised fresh concerns about thousands of jobs and the country’s last blast furnaces.
According to a news report by the BBC, the UK government’s talks with China-based Jingye Group, the owner of the UK-based steelmaker British Steel, have reached a critical impasse over the Scunthorpe steelworks. Ministers accuse Jingye of demanding “hundreds of millions” in taxpayer money to transfer ownership – a sum they say is far above the company’s real value. The deadlock has stalled efforts to secure a new buyer and raised fresh concerns about thousands of jobs and the country’s last blast furnaces.
In April, the UK government took control of steelmaker British Steel to prevent the closure of two blast furnaces at its Scunthorpe plant, as SteelOrbis previously reported. Full nationalization was initially considered, but ministers hoped Jingye Group would transfer ownership for a nominal fee. British Steel is officially still owned by Jingye Group, as the government stopped short of a complete takeover. Full nationalization remains a last resort, with ministers wary of discouraging foreign investment.
At the end of March, British Steel started the consultation process for the closure of two blast furnaces at the Scunthorpe plant, following Jingye’s rejection of a £500 million support package offered by the UK government.
Virgin steel is out of date. It’s the quality of steel that matters
Civil society organisation SteelWatch has called the ongoing argument over the UK’s need to produce “virgin steel” via blast furnaces outdated, with investment in fact needed in electric arc furnaces to produce competitive low-emission steel, Kallanish learns.
It says that following the recent government intervention in British Steel, the UK needs to “invest forward, not backward for competitive low-emissions steel”.
“This argument about ‘virgin steel’ is out of date. It’s the quality of steel that matters. In the future industry, electric arc furnaces powered with renewable electricity will provide a full spectrum of steel products, with a mix of recycled scrap and some low-emissions iron that can be bought in briquette form,” says Caroline Ashley, executive director at Steelwatch.
The organisation calls for an industrial strategy that protects jobs, cuts CO2 emissions and modernises the sector to ensure a renewable-powered and therefore competitive economy.
“Blast furnaces have been around for 300 years and a decent transition can’t happen in a matter of days. But what really matters is to use this reprieve to plan transformation of UK steelmaking to a competitive and low-emissions future. That will mean investing in electric arc furnaces and getting past the myths that preserving the UK’s steelmaking capacity is the same thing as preserving its blast furnaces – it’s not,” she adds.
SteelWatch highlights the UK’s ample scrap resources for EAF-based production, with green iron available from “long-standing trading partners like Sweden, Canada and Australia”. It also notes the US uses EAFs for 70% of its steelmaking, with 90% of new steelmaking capacity announced also being EAFs.
It disagrees with the notion that BFs are needed for quality steel, highlighting Volvo and Mercedes procuring EAF-based steel, while Sheffield Forgemasters supplies the defence industry with steel produced via this route. In France, railway operator SNCF has already entered into contracts for greener steel, made in an EAF.
To remain competitive, the UK must modernise its production infrastructure, it adds.
Ashley adds: “Emotions in the UK are high and there is a lot of confusion that, for the UK to ‘make its own steel’ it must ‘keep its own coal-based blast furnaces … UK-based electric arc furnace is just as much ‘UK steel’ as any other.”
“The economies and industries of the future, including steelmaking, will be powered by renewable energy. If Britain wants to lead, it must invest in the future, not double down on a fossil-fuels based past. A shift to green steel is not about giving up on British Steel, but upgrading it, taking workers along every step of the way,” she notes.
The organisation also notes the decline in domestic steel production started before the Paris Agreement and net zero targets were introduced.
Raw materials secured to keep British Steel BFs alight, UK govt says
Operations at British Steel were taken over by the UK government over the past weekend following failed negotiations with Chinese owner Jingye over the future of the plant.
“After intensive work over the weekend, the government has secured coke and iron ore pellet for the BFs, and is confident that there will be enough materials to keep the furnaces burning,” the UK Department for Business and Trade (DBT) said on Tuesday.
At Immingham, a major port on the east coast of England, raw materials shipped from the US have been unloaded and transported to the site “following the government settling payment for them,” the DBT said.
“The materials are enough to keep the blast furnaces running for the coming weeks, with officials continuing to work at pace to get a steady pipeline of materials to keep the fires burning,” it added.
A separate vessel with coking coal was on the way to the UK from Australia, the DBT said, adding that the cargo was “the subject of a legal dispute between British Steel and Jingye over the weekend that has now been resolved” and has been purchased using the existing DBT budget.
“It’s a huge relief that this crucial and overdue shipment of coke arrived at Immingham this morning,” Alasdair McDiarmid, assistant general secretary of trade union Community, said on April 15. “We thank the prime minister and business secretary for their decisive action to secure the raw materials required to keep the blast furnaces [in operation].”
British Steel has installed capacity for 4.3 million tonnes per year of pig iron, and four BFs. It can manufacture a wide range of long steel products, including rails, wire rod, sections and slabs.
Of the four BFs at the site, only two were still operational, but a lack of critical raw materials in stock – iron ore and coking coal – put them on the verge of a complete and potentially very costly shutdown.
If temperatures in the BF were to fall below critical levels, it could disrupt the smelting process, and result in damage to the furnace lining, blockages to inlets and outlets, and difficulties in restarting the furnace. The “cold” furnace would probably need extensive repairs before it could be reheated safely.
EAF future awaits?
Should the two operational BFs be preserved and remain in operation, thoughts will turn to the future of the Scunthorpe plant, which industry sources still expected would make the transition to become a greener and recycling-dependent electric-arc furnace (EAF) operation.
“There is now some demand for lower-emission steel, with some UK construction customers preferring to import EAF steel rather than continuing to use BF steel made in the UK,” a spokesperson for industry body UK Steel told Fastmarkets on Monday.
“Our energy costs are [among the] dearest in the world, so we will never be competitive in steel,” a major UK scrap processor said on Tuesday.
British Steel’s product mix was not sufficiently specialized to shield it from global competition, the same source said. He pointed out that Indian steelmakers can easily make large volumes of rail with lower costs for “compliance”, health and safety, and energy than in the UK.
Energy costs were also making the processing of scrap very expensive in the UK, he said, but added that British Steel moving to an EAF model would be a boon for scrap demand in northern England at a time when minimal volumes were being sold into the local market, with most UK scrap bought by export docks.
In March 2025, Jingye turned down £500 million ($661 million) in financial support, offered by the UK government, intended to support British Steel’s transition to green steel production by moving production toward the use of EAFs.
Wales-based Tata Steel accepted a similar £500 million offer in public funding from the UK government to develop a greener EAF-based steelmaking plant at Port Talbot in September 2024, with the company pledging to invest an additional £750 million.
The UK produced just 4 million tonnes of steel in 2024, down by 29% year on year from 5.6 million tonnes in 2023, ranking the country’s economy just 35th in the world as a steel producer, according to the World Steel Association.
At the same time, the UK imported 6.45 million tonnes of iron and steel products over the year, according to UK customs data cited by Global Trade Tracker.
UK government takes control of British Steel
The UK government has taken control of British Steel after the recalling of Parliament for a rare Saturday sitting on 12 April to debate its Steel Industry Bill, in a bid to keep blast furnaces alight at Scunthorpe, Kallanish reports.
The Steel Industry (Special Measures) Bill, which was approved by both parliamentary houses and became law after being granted Royal Assent, is not yet full-blown nationalisation, as ownership of the assets has not been transferred.
Jonathan Reynolds, the Secretary of State for Business and Trade, said during Saturday’s debate that the government had been negotiating in good faith with British Steel parent company Jingye. It had made a “generous” offer “that included sensible, common-sense conditions to protect the workforce, protect taxpayers’ money, and create a commercially viable company for the future,” he observed. “Despite our offer to Jingye being substantial, it wanted much more – an excessive amount, frankly.”
The offer was likely an improvement on the £500 million ($654m) believed to have been offered by government in late March, which Jingye rejected.
“However, we remained committed to negotiation, but over the past few days, it has become clear that the intention of Jingye was to refuse to purchase sufficient raw materials to keep the blast furnaces running. In fact, its intention was to cancel and refuse to pay for existing orders. The company would therefore have irrevocably and unilaterally closed down primary steelmaking at British Steel,” Reynolds added.
He also highlighted the government had offered to purchase the raw materials to keep the BFs going. However, “a counter-offer was instead made by Jingye: that we transfer hundreds of millions of pounds to it, without any conditions to prevent that money, and potentially other assets, being immediately transferred to China,” Reynolds noted.
“Jingye also refused the condition of keeping the blast furnaces maintained and in good working order,” he added.
Meanwhile, Reynolds said that if there was a transfer of ownership, the government would pay fair market value for the assets, but “in this case, the market value is effectively zero”.
He also noted that Jingye’s “intention has been to keep the downstream mills … and supply them from China, rather than from Scunthorpe.”
“A transfer of ownership to the state remains on the table. It may well, at this stage, given the behaviour of the company, be the likely option,” Reynolds continued.
However, he added that government’s “aspirations for British Steel remain a co-investment agreement with a private sector partner to secure a long-term transformation … The state cannot fund the long-term transformation of British Steel, nor would it want to.”
British Steel previously announced its transition to electric arc furnaces would cost £1.2 billion ($1.6 billion).
Gareth Stace, UK Steel director general, welcomed the new legislation. “A blast furnace is a dynamic piece of machinery. If the fires go out, it is nigh on impossible for it to be brought back to life – so a solution to keep them running is time-critical. It is, therefore, vital that the blast furnaces remain operational during negotiations, providing some security and breathing space in the short term, and this legislation will ensure this can happen,” Stace asserted.
British Steel starts consultation to close Scunthorpe BFs
British Steel says it will consult with workers and trade unions on the closure of its two blast furnaces, steelmaking operations and a reduction of steel rolling mill capacity in Scunthorpe, Kallanish learns.
It says challenging market conditions and significant ongoing financial losses have made it unsustainable to continue operating the blast furnaces and wider steelmaking operations.
It adds it will engage with ministers to seek options for support on transition to electric arc furnace steelmaking. However, this news comes the day after British Steel rejected a government funding offer, believed to be £500 million ($644m).
The steelmaker says following many months of negotiations, no agreement with government has been reached. As a result, the “difficult decision” has been made to begin a formal consultation with employees and unions from 27 March.
It adds that since 2020, British Steel owner Jingye has invested more than £1.2 billion to maintain operations amid ongoing production instability and significant financial losses of around £700,000 a day. Despite this, the blast furnaces and steelmaking operations are no longer financially sustainable due to highly challenging market conditions, the imposition of tariffs, and higher environmental costs relating to the production of high-emission steel.
The consultation will propose three options, including the closure of BFs, steelmaking operations and Scunthorpe rod mill by early June 2025, or BF and steelmaking operation closure in September. The third proposal is the BF and steelmaking operation closure at a future point beyond September.
British Steel chief executive Zengwei An says: “We understand this is an extremely difficult day for our staff, their families, and everyone associated with British Steel. But we believe this is a necessary decision given the hugely challenging circumstances the business faces.”
In its most recent financial report, the firm announced an eightfold increase in pre-tax losses, noting its ageing and high-cost assets. The company has experienced BF operational issues for some time, with losses growing yearly.
In a statement emailed to Kallanish, business and trade secretary Jonathan Reynolds says: “I know this will be a deeply worrying time for staff and, while this is British Steel’s decision, we will continue working tirelessly to reach an agreement with the company’s owners to secure its future and protect taxpayers’ money.”
He adds there is a bright future for UK steelmaking, given the government’s commitment of up to £2.5 billion to rebuild the sector, and the upcoming Plan for Steel.
The government has made clear that any offer of grant funding for the company must be the right deal for taxpayers. British Steel is said not to have met standard conditions guaranteeing respect for workers, support for the local area and ensuring the company’s long-term commercial viability.
UK Steel director general Gareth Stace called the move by British Steel a “gut punch to UK steelmaking” that will have “a profound impact felt throughout the British economy.”
“The end of steelmaking at British Steel would mean we have a major gap in capacity to meet the future demand of the nation and will be an irreparable break in the armour of national security,” he adds. “Government must get back to the negotiating table.”
UK industry minister Sarah Jones said later on Thursday that government hopes British Steel returns to negotiations, but it does not rule out nationalising the steelmaker (see separate story).
Carrie Bone UK
British Steel opens new steel profile service centre
British Steel has announced the opening of a £26 million ($31.6m) service centre at its special profiles business in Skinningrove, UK, Kallanish learns.
The site specialises in manufacturing steel profiles for the earth moving, forklift, construction, shipbuilding and mining markets. The investment will establish it as one of the leading suppliers to the forklift truck mast industry.
Its milling capability will primarily service the demanding high-reach forklift truck market. The company adds that the investment will enable the company to explore growth opportunities across the globe for its standard and bespoke forklift mast profiles, with the new warehousing and processing facility forecast to significantly increase throughput within the next two years.
“This is the largest single investment in our special profiles business for more than 30 years, demonstrating our owner’s commitment to strengthening British Steel’s position at the heart of UK manufacturing,” states Richard Napier, British Steel’s sales director for special profiles.
“The new facility also firmly establishes us as one of the world’s leading manufacturers and processors of value-added profiles for the forklift industry. Our extended range of products are designed and manufactured to exact customer requirements, with the new milling capability offering profiles with tolerances of just 0.1mm – precision few global competitors can match,” he adds.
The facility includes four new CNC lathes for turning mill rolls, three automated bandsaws for cutting stock to exact lengths, a laser measurement system for process control of every bar rolled, and a warehousing system for storing and processing material from the rolling mill. It also incorporates a 14-metre bed, milling machines.
Steel for the rolling mill at Skinningrove, including the new service centre, is manufactured in Scunthorpe.
Late last year the company also opened a £10m rail stocking facility in Scunthorpe.
Carrie Bone UK
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.
