UK's Second-Largest Steel Company Could Collapse

British Steel, the second-largest steel company in the United Kingdom, is on the brink of financial collapse, causing an economic emergency and prompting the British government to tackle the crisis.

If the steel producer fails, it could put 25,000 jobs at risk. The company will need an emergency 30 million pounds ($38 million) in order to stay solvent.

Jeremy Corbyn, the head of the British Labour Party, has called for British Steel to be nationalized, the BBC reported Tuesday.

"If an agreement cannot be struck with British Steel, the government must act to take a public stake in the company and protect peoples' livelihoods and communities," he said.

Andrew Stephenson, a junior business minister, told the U.K. parliament that the government was in discussions with the company and that it would "leave no stone unturned in its support for the industry."

British Steel is headquartered in the northern city of Scunthorpe. Industry plays a vital role in northern England, and British Steel going bankrupt could further worsen the economy there, as it is where some of the U.K.'s poorest regions are located.

"The statement from the business minister today provides a glimmer of hope for the Scunthorpe site," British Steel managing director Gareth Stace said. "This does provide some breathing space for the company, its employees and the wider steel sector, providing a potential route towards a stable and sustainable future."

In greater Europe, the steel industry is in an economic downturn. E.U. steel company shares are trading at the lowest in three years due to low demand, especially towards automobiles, as the United States has placed trade tariffs on European goods.