British Steel owed nearly £1 billion to its previous Chinese owners when it was nationalised by the UK government, according to recently published accounts. The company was officially taken into public ownership in July to safeguard jobs and maintain operations at its Scunthorpe blast furnaces.
The accounts, signed off by Jingye Group, British Steel’s former parent company, reveal outstanding inter-company loans totaling around £960 million as of the end of 2024. Jingye is expected to seek compensation for this debt and has initiated legal proceedings under an existing UK-China investment treaty.
The documents also highlight the significant financial challenges facing British Steel. A fresh capital injection of between £275 million and £330 million will be required within the next 12 months to keep the business running. Prior to nationalisation, the Treasury had already provided approximately £555 million in working capital support.
An audit review indicated that the company’s tangible assets, including property, plant, and equipment, have little recoverable value. British Steel, which employs around 2,700 people, has operated at a substantial loss, recording a £254 million deficit on sales of £829 million in 2024. This translates to a loss of roughly £201 for every tonne of steel produced before taxes.
Production volumes dropped sharply, with liquid steel output declining nearly 25% to 1.3 million tonnes last year amid ongoing operational difficulties. The business experienced several "chill" events, where blast furnaces failed to maintain the necessary temperatures, sometimes leaving only a single furnace in operation. The instability also led to the manufacture of steel deemed unfit for use on multiple occasions.
Industry insiders have described British Steel as a “money pit,” noting that continued operation of the blast furnaces could result in sustained heavy losses. While closure might be economically rational, political considerations have complicated the decision.
The government assumed operational control of British Steel in April 2025 amid concerns that Jingye was not securing sufficient raw materials to maintain furnace operations, allegations that Jingye has denied. Parliament subsequently passed legislation granting ministers the power to nationalise the company in the public interest, with provisions requiring consideration of compensation for Jingye. An independent valuation process is scheduled for the autumn and may conclude that no payment is necessary.
The nationalisation move elicited a strong response from Beijing, which expressed “strong dissatisfaction.” A UK government spokesperson described the steelworks as “critical national infrastructure,” affirming the administration’s commitment to stabilising the business, supporting affected communities, and developing a more sustainable, competitive, and decarbonised steel sector over the long term.