British Steel is battling for survival amid fears it may be on the brink of collapse, which could threaten up to 25,000 jobs at Scunthorpe’s steel plant and its suppliers.
The second largest steelmaker in the UK announced last Thursday that it had enough cash to continue to operate despite orders tumbling, after securing the backing of lenders and shareholders.
But sources have told Sky News and Reuters that the firm, its lenders and the government are preparing to put the firm into administration unless another deal to keep it afloat can be struck this afternoon.
The fears have already sparked fresh calls from unions and the opposition Labour party for the government to step in to support a major manufacturing industry.
The collapse of the firm could spell disaster for Scunthorpe and its steel workers, with more than 4,000 employed at the giant plant itself and up to 20,000 more jobs reportedly dependent on it in the supply chain.
The industry has been battling many headwinds, from Chinese competition and Trump’s tariffs on EU steel to high energy bills and sterling’s plunging value.
One source told Reuters the loss-making firm, bought from Tata by Greybull Capital in 2016, would not be able to survive without a £30m ($38.1m) emergency loan from the UK government.
Reuters also reports that customers’ fears of further tariffs are damaging orders at British Steel. Unions also warned earlier this year that the government’s plan to cut global import tariffs on steel to zero would “destroy” jobs in the event of a no-deal Brexit.
The UK government had already announced a £120m loan to British Steel earlier this month, in an uncharacteristic move by the ruling Conservatives to prop up an ailing firm.
And a minister had signed a pledge to promote the use of UK steel in British construction projects only yesterday, in a move that may come to be seen as too little, too late.
"Yesterday the government, alongside trade unions and employers, signed a UK Steel Charter at Westminster," said Ross Murdoch, national officer at the GMB union.
"They must now put their money where their mouth is. GMB calls on the government and Greybull to redouble efforts to save this proud steelworks and the highly skilled jobs."
Gill Furniss, Labour’s steel spokeswoman, also backed calls for the government to step in.
She said: "The UK steel industry is critical to our manufacturing base and is strategically important to UK industry.”
"Administration would be devastating for the thousands of workers and their families who rely on this key industry in a part of the country which has not had enough support and investment from government over decades.”
British Steel was bought by investment firm Greybull Capital for £1 in 2016 from Tata, and they renamed the company after the historic British state company of the same name.