More Than 650 Jobs at Risk as Scrap Metals Giant Unimetals Files for Compulsory Liquidation

The UK’s scrap metals and recycling industry has suffered a major shock after Unimetals Recycling (UK), once seen as a potential cornerstone of the green industrial transition, formally filed for compulsory liquidation. As a result, more than 650 employees across 27 sites nationwide now face the prospect of redundancy, at a time when the metals market is already under intense pressure.

According to legal filings, Unimetals’ owners submitted a winding-up petition earlier this week after failing to secure a buyer or new investor, despite launching an accelerated mergers and acquisitions process with the support of financial advisers.

A bold ambition cut short

Founded in 2023 by metals traders Jamie Afnaim and Alec Sellem, Unimetals set out to build a large-scale recycling group focused on strategic metals and critical minerals essential to the transition away from fossil fuels. In public statements and social media profiles, the company’s leadership described a long-term vision of consolidating and restructuring metals recycling businesses across the UK and Europe.

That ambition came into sharp focus in October 2024, when Unimetals agreed to acquire the UK assets of Australian metals group Sims for £195 million. The deal covered four metal shredders, three port facilities and a network of 27 sites, with headquarters in Stratford-upon-Avon. At the time, industry observers viewed the move as an attempt to position the company at the heart of the shift toward electric arc furnaces (EAFs), which rely heavily on recycled steel and produce significantly lower emissions than traditional blast furnaces.

However, market conditions soon turned against the company.

Oversupply squeezes margins

By early 2025, Unimetals was struggling amid excess scrap steel supply, while demand from steelmakers failed to keep pace. Scrap prices weakened, sharply eroding margins for recyclers already burdened with high operating and financing costs.

“Metals recycling is a highly cyclical business,” said Richard Lewis, an independent metals market analyst based in London. “When finished steel prices soften, scrap demand drops almost immediately. New entrants like Unimetals, carrying debt from large acquisitions, often lack the financial buffer needed to weather such downturns.”

Although Sims agreed to defer a final payment, Unimetals was unable to raise sufficient funds. Under Sims’s ownership, the UK business had already recorded a £22 million loss in the year to June 2023, leaving a heavy financial legacy that proved difficult to reverse in a short time frame.

More than 650 jobs under threat: a structural labour shock

Beyond the corporate collapse itself, the most immediate concern is the impact on employment across the sector. With more than 650 workers at risk—many based at port facilities and shredding plants—the liquidation represents not only personal hardship but also a significant blow to local labour markets that depend on industrial recycling.

Helen Carter, a labour economist specialising in heavy industry at the University of Birmingham, said the situation reflects a broader structural reshaping of labour supply within the metals recycling sector.

“The industry is moving away from labour-intensive, fragmented operations towards more automated, technology-driven and integrated systems aligned with the green transition,” she said. “This leaves a large segment of traditional workers exposed when companies face financial distress.”

Experts warn that without coordinated reskilling and redeployment programmes, many affected workers may struggle to re-enter the job market, as the sector increasingly demands higher technical and digital skills.

Long-term prospects remain positive—but selective

Despite Unimetals’ failure, analysts agree that the long-term outlook for metals recycling remains strong. Growing demand for recycled steel, aluminium and copper—driven by electric vehicles, renewable energy and grid expansion—continues to underpin the sector’s strategic importance.

Yet, according to Mark Ellison, a former metals adviser to the UK Department for Business and Trade, the industry is entering a more selective phase.

“Only companies with strong balance sheets, disciplined risk management and well-designed labour strategies will survive,” he said. “The era of rapid expansion through large acquisitions is over. Efficiency, integration and workforce optimisation are now the priorities.”

Last-ditch efforts and an uncertain future

In a statement, a Unimetals spokesperson said the company had “worked tirelessly” to secure new financing, including fast-tracked M&A discussions conducted in close collaboration with stakeholders, but no transaction was ultimately concluded. The company acknowledged the distress faced by employees and said it was urgently working to establish a clear plan and timeline for next steps.

Professional services firm Alvarez & Marsal is understood to be overseeing discussions about the company’s future. Unimetals also owns a hydrometallurgical facility in Kezad, near the port of Abu Dhabi, raising the possibility that parts of the business could be sold separately.

A warning sign for the wider industry

The collapse of Unimetals is not merely the story of a young company’s failure; it is a cautionary tale for the wider metals recycling industry during a period of rapid transformation. While the green transition offers vast opportunities, it also brings significant risks—particularly for workers—if labour restructuring is not carefully planned and supported.

Ultimately, the challenge extends beyond rescuing individual firms. It lies in building a resilient and sustainable recycling ecosystem, one in which capital, technology and human resources can adapt together to the new industrial order now taking shape.

Source: theguardian