BUSINESS

Chinese Steelmaker’s Overseas Expansion Falters With British Steel Failure

Published: May. 9, 2025 8:07 p.m. GMT+8

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The British Steel Ltd. plant in Scunthorpe, U.K., on March 27, 2023. Photo: Bloomberg

Hebei Jingye Group Co. Ltd.’s overseas expansion efforts have hit a snag as the private Chinese steelmaker failed in its promise to turn its 5-year-old acquisition of British Steel Ltd. into a profitable venture.

On March 27, British Steel announced plans to close its two blast furnaces and steelmaking operations in Scunthorpe, England, because they “are no longer financially sustainable due to highly challenging market conditions, the imposition of tariffs, and higher environmental costs relating to the production of high-carbon steel.”

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Hebei Jingye Group’s acquisition of British Steel failed to achieve profitability, with the Scunthorpe plant losing £700,000 daily and British Steel reporting significant losses in 2022 (£408 million) and 2023 (£250 million).
British Steel announced closure of its Scunthorpe blast furnaces due to unsustainable finances, market conditions, tariffs, and environmental costs; this led the UK Parliament to pass emergency measures to support continued operations.
British Steel is the UK’s sole steel rail provider and key supplier for construction projects, but faces industry-wide challenges from rising costs, shrinking demand, and post-Brexit uncertainties.

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Who’s Who

Hebei Jingye Group Co. Ltd.: Hebei Jingye Group Co. Ltd. is a private Chinese steelmaker that acquired British Steel Ltd. in 2020. Despite promises to turn the business around, Jingye has struggled with losses, facing challenging market conditions, higher costs, and tariffs. The company recently considered shutting down major operations in the UK due to ongoing financial difficulties, prompting government intervention to support the steel industry and protect British jobs and infrastructure.

British Steel Ltd.: British Steel Ltd. is the sole manufacturer of steel rails in the U.K., supplying about 95% of metal for Network Rail and steel for three-quarters of large construction projects. Acquired by China's Jingye Group in 2020, it has struggled financially, leading to plans to close its main Scunthorpe blast furnaces. The U.K. government has intervened to keep operations running due to the company’s strategic importance.

Covington & Burling LLP: Covington & Burling LLP is a law firm mentioned in the article for its analysis of the Steel Industry (Special Measures) Act passed by the UK Parliament. The firm’s lawyers noted that the act does not nationalize British Steel, nor does it automatically grant the UK government direct control or ownership of the company or its assets.

Network Rail Ltd.: Network Rail Ltd. is the owner and infrastructure manager of most of the United Kingdom’s railway network. British Steel is the sole manufacturer of steel rails in the U.K. and supplies about 95% of the metal used by Network Rail, making it a critical supplier for the country’s rail infrastructure needs.

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