India's Tata Steel has put its entire UK business up for sale to stem heavy losses in a move that puts thousands of workers' jobs at risk.
Its European arm is looking at "all options for restructuring" including selling part or all of UK operations.
The UK and Welsh Government are understood to have been working through the night to secure a deal that could stem losses from Tata plants at Port Talbot and elsewhere.
Workers at other plants in Rotherham, Corby and Shotton could also be affected.
High manufuacturing costs, competition from China and a global oversupply of steel have made business too expensive in the UK, Tata said.
"These factors are likely to continue into the future and have significantly impacted the long-term competitive position of the UK operation," Tata said.
In a joint statement, the UK and Welsh governments said: “We remain committed to working with Tata and the unions on a long-term sustainable future for British steel-making.
"Both the UK and Welsh governments are working tirelessly to look at all viable options to keep a strong British steel industry at the heart of our manufacturing base."
In January the company announced more than 1,000 UK job cuts, including 750 in Port Talbot, where it employs 4,000 staff and a further 3,000 contractors and temporary workers.
That comes after 1,200 job losses at Tata plants in Scunthorpe and Lanarkshire last October, at the same times as steel manufacturer SSI closed another plant at Redcar in what has been a period of decline for UK steel.
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