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Race to keep furnaces burning at British Steel plant

Race to keep furnaces burning at British Steel plant

Yahoo14-04-2025
Officials are working to deliver essential raw materials to British Steel's Scunthorpe plant, the government has said, as it races to keep its blast furnaces burning.
An emergency law rushed through Parliament on Saturday gave the government control of the Lincolnshire site to prevent its Chinese owner shutting it down.
The government said work was under way on Monday to obtain the coking coal and iron ore that power the plant's two furnaces - materials it previously said owners Jingye had been selling off.
"My team are already hard at work on the ground to keep jobs going and furnaces burning," the business secretary said in a statement.
Dozens of businesses including steel producers Tata and Rainham Steel have offered help and to supply their raw materials, the government added.
How quickly materials get to the site is important because blast furnaces can sustain permanent damage if their temperature drops too low.
Restarting a furnace that has shut down is also a costly and complex process.
Why did the government take control of British Steel?
Chris Mason: British Steel law rushed through Parliament but it is just a stop gap
Reynolds refuses to say if steel furnaces can keep running
Business Secretary Jonathan Reynolds said: "When I said steelmaking has a future in the UK, I meant it.
"That's why we've passed these new powers to save British Steel at Scunthorpe and that's why my team are already hard at work on the ground to keep jobs going and furnaces burning."
Civil servants and British Steel officials are trying to secure one such shipment of materials which is sat 30 miles east of Scunthorpe at Immingham Docks.
It comes after Reynolds refused to confirm on Sunday whether the government could obtain the materials in time.
"I'm not going to get into that," he told the BBC's Sunday with Laura Kuenssberg programme, but said the takeover gave the "opportunity" to obtain the materials needed.
The Scunthorpe plant employs 2,700 people and is the last site in the UK that can produce virgin steel.
Without the plant, the UK would be the only member of the G7 group of leading economies without the ability to make virgin steel - which the government believes is a risk to the country's economic security.
The government fast-tracked legislation which gave it control of the plant after talks with Jingye to save it appeared to break down.
The company said in March it was losing £700,000 a day at the site, which it called "no longer financially sustainable," and began a consultation on its closure.
Reynolds told the BBC it "became clear" during negotiations that Jingye was intent on closing down the blast furnaces no matter the financial support offered.
The government said Jingye refused an offer of some £500m and demanded more than twice as much money, with few guarantees it would keep the plant open.
"It might not be sabotage, it might be neglect," Reynolds said of the company's actions.
The Conservatives have criticised the government for not stepping in sooner to save the plant.
Tory shadow business secretary Andrew Griffith said the party had supported the emergency law because "it's the least worst option on the table".
Can UK afford to save British Steel – and can it afford not to?
British Steel
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While capital raising was dead much of this year, companies in June began raising money again through initial public offerings, follow-on raises, and convertible bonds, all of which "accelerated towards the end of the quarter, as global issuers and investors gained confidence amid a market rebound," according to Morgan Stanley's mid-July earnings call. This allows companies, "garbage" or otherwise, to improve their prospects by injecting their coffers at attractive valuations, potentially boosting their stock price as well. While many hedge funds closely monitor such activity, it's not traditionally the bailiwick of quants. "Quants don't sit in that business and they don't see that flow," the multimanager exec said. All eyes on the industry's largest quant funds Understanding the source of the quant carnage is one question. Identifying when the pain will abate is equally important. One trader who works at one of the industry's largest quant funds told BI that the actions of the biggest firms will be the most significant factor over the next week. If these funds are forced to sell, then there could be serious pain that could impact everyone from Fidelity mutual funds to Robinhood retail traders. "Some small players don't have a choice but to capitulate," the multimanager exec said, adding that the larger firms know that if a major peer cuts its exposure, "then it becomes a bigger contagion and gets out of hand." This hasn't happened yet, and some are betting that the bigger players will just sit tight. The size of the funds, the pain tolerance of their executives, and the trust they have in their models is where the quant heavyweights have the ability to shine. They either have investor capital locked up for years or a giant horde of internal money — meaning they can withstand losses for longer, especially if they anticipate a bounceback. 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