For British Steel, Nationalization Looms – Again

British citizens could be forgiven to think in early April that they had been transported over time, among the suggestions of British steel should be nationalized – something that happened in 1967.

British Steel (subsequently privatized in 1988) was a much larger entity than that of today – which was created in 2016 from assets acquired in Tata Steel, then bought by the Jingye group in China in 2020. The essential problem – the non -competitive nature of the domestic production of steel compared to much cheaper imports, in the midst of an industrial discharge – is similar and composed United Kingdom, now in the waste.

Jingye has tried to close his fours scunning of losses, which produce steel considered economically and strategically vital for national interest. The closure would leave the United Kingdom as the only leading European economy unable to make its own steel and depend on cheap imports, especially China.

British Steel’s long -term future is not clear. The government said it would save the 2,700 threatened jobs and maintain the ovens to burn with regular coke – vital fuel supplies if the factory should survive (if it cools, the factory becomes non -viable). He also said that he would continue to look for another buyer / partner.

BMI, a company of Fitch solutions, argues that the transition from the draft law on steel industry (special measures) on April 12 “will most likely be” to a nationalization of British steel, since the government now has a de facto property of long -term assets.

The crisis has exposed the attitude of the United Kingdom to Chinese investments, especially in the industries considered to be strategic. He followed the decision to force 35 British telecommunications suppliers to withdraw Huawei technology from their 5G services by 2027. This is a large tour of 10 years ago, when the conservative government impatiently asked for Chinese investments, then Prime Minister David Cameron directed several large -scale delegations to Beijing. The Chinese Foreign Ministry said that politicizing the crisis could discourage Chinese investments elsewhere in the United Kingdom, but business secretary Jonathan Reynolds refused to exclude the possibility of sabotage from Jingye, saying that his management was best to neglect.

“Economic relations are definitively on a downward trajectory, with British Steel, just the last in a series of controversies,” said Charlie Robertson, head of strategy at Investment Fund Fim Partners.