The closure of British Steel's coking ovens in Scunthorpe, which will result in the loss of 300 jobs, is anticipated to be announced on Wednesday.
Uncertainty surrounds the closure's timing as well as the number of forced layoffs it will entail.
Coal is converted into coke in coking ovens, which burns at the higher temperature required by the two remaining blast furnaces.
As a result of the closure, British Steel will import coke.
Coking oven closures are viewed as a troubling sign for the state of the UK steel industry.
According to union representatives, the industry "is on a knife edge.".
Given that talks about a support package worth £300 million to each company are still ongoing between British Steel's Chinese owners Jingye, Tata, and the Treasury, government sources called the decision "disappointing.".
A spokesman for British Steel said: "Unfortunately, like many other businesses, we are reluctantly forced to consider cost cutting due to the global recession and rising costs. ".
Jingye has committed to a long-term investment of £330 million, but a spokesperson for British Steel said the company is "facing significant challenges due to the economic slowdown, rising inflation, and exceptionally high energy prices.".
Internationally, UK steelmaking is "uncompetitive," the spokesperson continued.
According to union sources, the government offers have been rejected thus far because of their excessive conditions, which include 10-year job guarantees.
They added that the offers are also insufficient to cover the estimated £2 billion cost of switching from blast furnaces to more energy-efficient electric arc furnaces.
Electric arc furnaces use recycled steel as fuel because they cannot produce new steel at high enough temperatures. At the moment, recycling scrap steel here is more expensive than sending it to Turkey and Indonesia.
The UK's need for a steel industry is "not a given," according to Business Secretary Kemi Badenoch, who also acknowledged the industry's significance "in the communities in which they operate.".
The number of voluntary and required layoffs will be discussed starting next week, and there are rumors that the closure could occur by the end of the year.
There are worries about additional job losses throughout the plant.
British Steel was considering cutting 800 jobs at its Scunthorpe plant at the beginning of February.
At the time, a Jingye representative called the discussions about government support "unsatisfactory.".
The representative claimed that the proposed support package did not address high energy, labor, and carbon costs as well as weak domestic demand.
