A New Chapter in British Steel

1. Blog: Alexandersteel.co.uk A New Chapter in British Steel It’s finally happened. British Steel is now under Chinese ownership, with the sale to Jingye Group finalised on 9th March.This arrangement, which included the company’s Dutch assets, has apparently saved more than 3,000 jobsin Scunthorpe and Teesside and should help in the drive to modernise the towns' steelworks.Jingye reportedly offered £50m to acquire the company after it collapsed and was placed under the control of the UK Insolvency Service last year. It has pledged this month to invest around £1.2bn over the next decade on upgrades to plants and machinery. At Alexander Steel we’re often asked for our views on various takeover proposals. As experienced steel stockholders in Liverpool, we’ve seen a lot of change in the industry. Obviously, since British Steel was the second-largest steelmaker in the country, this manoeuvre has huge implications. In many ways it’s good news for our friends in the North- East, as they've been making iron and steel in Scunthorpe for a staggering 150 years now. It would have been heart-breaking to see that go; it’s a one-industry town and when the steelworks are lagging, the entire community notices. As long-running Liverpool steel fabricators, we’re a bit distanced from the day-to-day goings on in these old industrial heartlands (120 miles to our east), but we still feel a certain connection to our colleagues in the sector. Until recently it looked as if the acquisition might be called off, since the French government regards the plant in Hayange as a vital national asset (it provides track for the country's railways) and was preparing to veto the sale. Now it has happened and unions are praising the final deal, which includes the sites in Lackenby and Skinningrove, as a big win for the industry. It's tough to say if Jingye will succeed where others have failed to secure a bright future for British Steel. However, at Alexander Steel we always welcome any serious attempt at reinvigorating the UK steel industry – even if that involves rival companies. British Steel could definitely turn out to be one of the beneficiaries of HS2, which will require around 170 tonnes of long product rail and switch. There’s no reason why Scunthorpe cannot produce that –the alternative of purchasing raw materials from overseas would involve an unappetising 30% increase in supply chain costs. There’s no doubt that Jingye’s modernisation plans sound incredibly ambitious. We’re a lot more confident about the industry’s future now compared to the 2016 low point of British Steel’s sale by Tata for £1 to the private equity firm Greybull Capital.Above all, a detailed plan of action is firmly in place and the funds are there to support it. We’re always happy to talk to clients and the press about the fortunes and challenges facing the industry, so if you’d like to hear the insights of long-time steel stockholders in Liverpool (also known as the top Liverpool steel fabricators), then give us a call.