Britain's last blast furnaces are days away from closure after Chinese owners Jingye cancelled crucial raw material orders for the Scunthorpe site.
Union representatives report that Jingye has cut off future orders for iron ore, coal and other essential materials needed to keep the furnaces operational.
The move threatens to seal the fate of the UK's final domestic sources of virgin steel, which could now shut down as early as next month.
The Department for Business and Trade is actively considering nationalisation as time runs out for the historic steelworks.
Chinese owners Jingye cancelled crucial raw material orders for the Scunthorpe site
PA
The closure timeline has accelerated beyond initial projections, creating urgent pressure for government intervention.
Officials are now working against the clock to secure the future of steelmaking at Scunthorpe as Britain simultaneously contends with transatlantic trade tensions.
The fate of these blast furnaces will likely be determined within days.
While nationalisation is being considered, government officials remain wary of taking such radical steps.
There are concerns about leaving taxpayers exposed to a potentially loss-making business for the long term.
Negotiations between the government and Jingye collapsed last week after the Chinese company rejected a £500million public funding offer.
The money was intended to replace existing furnaces with electric arc furnaces, which produce significantly lower carbon emissions.
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Officials are now working against the clock to secure the future of steelmaking at Scunthorpe as Britain simultaneously contends with transatlantic trade tensions
PA
This £500m package mirrors what was offered to Tata Steel for its Port Talbot operations.
Jingye, which purchased British Steel out of receivership in 2020, deemed the amount insufficient to justify additional investment at Scunthorpe.
The company announced last week it was consulting on closure dates for both the blast furnaces and attached steelworks.
The closure would have significant strategic implications for UK infrastructure projects.
British Steel is the primary supplier of steel rails to Network Rail.
The company also produces specialised construction steels available from only a few manufacturing sites worldwide.
Without domestic production, the UK would become increasingly dependent on imports for critical infrastructure components.
The closure would have significant strategic implications for UK infrastructure projects
PA
This heightened reliance on foreign steel supplies comes at a time when global supply chains face growing uncertainty.
The potential loss of sovereign steel-making capability raises concerns about national resilience in key industrial sectors.
Gareth Stace, head of UK Steel, has issued an urgent appeal to the government to resume negotiations.
He said: "Talks seem to have broken down between government and British Steel.
"My advice to government is: please, Jonathan Reynolds, Business Secretary, get back round that negotiating table, thrash out a deal."
He warned that failure to reach an agreement quickly could have devastating consequences.
He explained: "If a deal can't be found in the next few days, then I fear for the very future of the sector, but also here for Scunthorpe steelworks."
