Embattled British Steel ‘losing up to £30m a month’

BRITISH Steel is losing between £20million and £30 million a month, The Mail on Sunday understands.

The Scunthorpe-based company made the admission in a meeting with other organisations last week, according to an industry source. There have been question marks over British Steel’s finances for months.

The Chinese-owned company has not yet released its most recent accounts, which were due on December 31 2022.

It is not clear why the company, which employs around 4,500 people, might be making such huge losses and for how long this would be sustainable. It collapsed in 2019 before being rescued by its current owners Jingye in March 2020.

When Jingye was bidding for British Steel, it appeared to offer to write a blank cheque to keep the steelworks going.

In a presentation delivered to officials at the time, the Chinese group said: ‘Need funds? No problem. Jingye is here to invest.’

Around 34,500 people work in the UK’s steel sector and it is seen as a critical industry.

It produces 7million tonnes of steel per year but faces stiff competition from cheap imports, particularly from China.

British Steel is also understood to be in talks with the Government to set up new green steelmaking facilities.

Along with Tata Steel, it is one of only two companies in Britain running blast furnaces, which make steel from scratch from raw materials.

Both are seeking funding to help them build cleaner electric-arc furnaces (EAFs).

Tata recently secured a £500million Government grant to set up an EAF.

It has previously been reported that state funding for British Steel is dependent on

Jingye committing to protect jobs and to invest at least £1 billion by 2030.

Separately, the company is suffering from a ‘temporary production issue’ which is understood to have hit steelmaking capabilities.

The precise nature and gravity of the issue is not clear, but the company said the matter would be ‘resolved at the earliest opportunity’.

A spokesman said: ‘We are manufacturing iron and steel and continue to work closely with our customers to satisfy demand and ensure they get the high-quality products they require.’