A “commercial solution” for British Steel is “within reach” according to Culture Secretary Lisa Nandy, as the government considers nationalising the Chinese-owned business.

Nandy told the BBC that British Steel – which employs 2,700 people – will “continue to be an important part of our economy for years to come” and an agreement over its future was “achievable and within sight”.

The company is at risk of running out of raw materials within weeks, raising fears over whether its blast furnaces which make high grade steel can keep running.

It comes as the steel industry deals with a 25% tariffs on exports to the US, which came into force last month.

British Steel, which has been owned by China’s Jingye since 2020, has said its two blast furnaces in Scunthorpe are “no longer financially sustainable”.

Jingye said it has invested more than £1.2bn into British Steel to maintain operations and claims it suffered financial losses of around £700,000 a day.

“I am absolutely confident that we are doing every single thing that we can to secure the future of British Steel and particularly the site at Scunthorpe,” said Nandy.

Simon Boyd, managing director of REIDsteel, a British Steel customer, told the BBC that government intervention was the “only solution if we want to keep steel making in the UK”.

He said the firm only has “days left to secure the order of materials to prevent the forced closure of the blast furnaces over the next month”.

“We’re talking days,” he warned.

The government has offered £500m of support to partly fund a switch from blast furnaces to more energy efficient electric arc furnaces.

But the move has been rejected by the company.

Electric arc furnaces also do not burn hot enough to make virgin steel, and are fed with scrap steel.

Mr Boyd said Scunthorpe’s current blast furnaces produce “the highest grade of steel available”.

“If we lose that capability we’ll be wholly reliant on [countries] like China producing the blast furnace steel and electric arc furnaces, which make steel out of scrap, are all well and good but they’re at least five years away,” he said.

It is very difficult and very expensive to get blast furnaces running again once they have been turned off, which would make the Scunthorpe site’s existing vulnerability even more perilous.

Mr Boyd added that he was “very encouraged” to hear the government is “finally” considering nationalisation.

Roy Rickhuss, general secretary of the UK’s largest steel workers union Community, told the BBC he agreed with the prime minister that “all options should be on the table and that includes nationalisation”.

“Whatever you decide to do, will come with a cost and if the government own the business then they’ll have to pick up that cost,” he added.

Asked if the government would nationalise British Steel’s furnaces in Scunthorpe, Chancellor Rachel Reeves said “all options remain on the table”.

“We’re doing everything we can to preserve those jobs and to support those communities,” she told reporters on Wednesday.

But the chancellor would not guarantee whether the plant would be able to acquire fresh raw materials in time to keep the blast furnaces running.

Asked to give such a guarantee, Reeves said: “We are in active discussions now with both the owners and the trade unions.”

Reform UK leader Nigel Farage called on the government to nationalise the Scunthorpe plant, order the raw materials, and then seek a consortium to take over the running of it.

“Unless within three days that Scunthorpe plant is nationalised, those blast furnaces will go,” he told BBC Breakfast.

“We will become the only country in the G20, the only major economy of the planet, that doesn’t produce primary steel”.

He called steel production “a vital strategic national asset” and claimed “we are witnessing de-industrialisation before our very eyes” because of the government’s drive for net zero carbon emissions.

“This really matters, and I want Keir Starmer to act. And do you know what? I think he will,” he added.

Conservative leader Kemi Badenoch says she wants the government to continue exploring commercial options for the British Steel site at Scunthorpe, citing her government’s actions when the Port Talbot plant was threatened.

Speaking to broadcasters while visiting Worcestershire, she said in Port Talbot “yes some jobs were lost, but we worked for a commercial decision that did not put too much pain on the British taxpayer”.

She said she was “amazed that nine months in, Labour have lost British Steel and now they’re talking about nationalisation,” adding: “I want to see what the commercial options are”.