But hardnosed economic realities suggest that the country's steel industry may already be a lost cause.
SEATTLE (Scrap Monster): The UK government's seizure of British Steel from Chinese company Jingye on national security grounds suggests extending North Sea oil and gas production is now a no-brainer.
The deteriorating global economic outlook resulting from U.S. President Donald Trump’s tariff war has led many European governments to reconsider their industrial policies and energy transition ambitions, amplifying a debate that started with the 2022 energy price shock.
Central to this new thinking is the need to secure supply chains by supporting strategic domestic industries.
The likely nationalisation of British Steel following an emergency vote by the UK parliament on Saturday is a case in point. And the episode might make the government rethink plans to reduce domestic production in an even more strategically important sector: oil and gas.
The government's radical action, following months of failed negotiations with British Steel owner Jingye prevents the company from shutting down the country's two last blast furnaces.
The rationale for wanting to keep them open is simple. British Steel supplies vital materials used for the railway and construction sector, and the government considers the steel industry central to its economic and energy transition strategies. National pride also doubtless played a role, given that Britain is the birthplace of the Industrial Revolution.
But hardnosed economic realities suggest that the country's steel industry may already be a lost cause.
The struggling steel sector is minuscule, contributing only 1.7 billion pounds ($2 billion) to the economy in 2024, or 0.1% of the country's total economic activity, according to government data. Its annual production represented a mere 0.3% of the worldwide total. Additionally, the sector faces stiff competition not only from China but also from Europe, where production power costs, opens new tab are significantly cheaper.
So nationalisation now appears to be too little, too late.
Courtesy: www.reuters.com
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