The UK government is exploring options to consolidate the country’s steel industry, which currently comprises six major producers. Four of these companies are receiving government support amid financial strain caused by high energy costs, global steel oversupply, and tariff pressures.
Officials in the Department for Business and Trade are prioritising private-sector-led solutions, seeking potential buyers rather than pursuing nationalisation. Recent government interventions have included taking temporary control of British Steel in Scunthorpe and Speciality Steels UK following financial collapses, while Tata Steel in Port Talbot received a £500 million rescue package to support its transition to low-carbon production. Sheffield Forgemasters was nationalised by the Ministry of Defence in 2021 after prolonged financial difficulties.
Speciality Steels UK has shifted to electric arc furnaces, and the government is covering wages and operational costs while negotiating with commercial buyers. British Steel remains under government oversight as negotiations continue with Chinese owner Jingye, which has requested a substantial sum to transfer ownership.
Government sources indicate a strategic preference for closer collaboration between all UK steel producers and long-term consolidation to strengthen financial resilience. Officials stress nationalisation is not the intended approach, and any merger would require agreement from current company owners.
Ministers are engaging with domestic and international stakeholders to secure a sustainable future for the UK steel sector while maintaining private-sector involvement.
