British Steel, the UK’s second largest steelmaker, announced on Tuesday that it had started bankruptcy proceedings to be taken over by the government’s official receiver, with ernst & young helping to liquidate the company and seeking a buyer.

British steel says it is facing a long-term financial crisis after brexit uncertainty led to a sharp drop in orders from its European customers, a weak pound and steel tariffs in the United States.British steel shareholders and the government failed to meet an afternoon deadline to reach a loan deal, despite an official from the department of commerce, energy and industry told parliament on Monday that the government would do all it could to support the industry.

About 5,000 workers at its main plant in scunthorpe, in the north of England, are at risk of losing their jobs.Another media report said that the company’s supply chain related to more than 20,000 employees will also indirectly face the risk of unemployment.Its biggest customer, Network Rail, supplies 95 per cent of its tracks from its scunthorpe plant.

The causes of iron ore price inflation are mainly supply and demand factors:

Supply and demand: in January 2019, Feijo iron ore mine in Brazil broke its dam. Vale mining group of Brazil has shut down its annual production capacity of more than 90 million tons. The amount of iron ore exported from Brazil dropped by 30% to 40%, resulting in a sharp rise in the international iron ore price, which increased by more than 24% to exceed 94.2 us dollars per ton.

China imports 20% of its iron ore from Brazil, meaning that the biggest beneficiaries of the cuts are Australia’s BHP billiton and Rio tinto.

China gets 60% of its iron ore from Australia.China’s iron ore supply is likely to increase by about 20m tonnes this year, as cuts by Brazil’s vale directly push up prices.

In a research note, citibank predicted that iron ore prices will be expected to further increase to $100 / ton.