Workers at British Steel’s Scunthorpe site have expressed anger and frustration over the plant’s uncertain future with the company on the brink of administration.

As people filed out of the sprawling works after a shift change on Tuesday, one employeeof 18 years said: “I’m worried sick and absolutely petrified. I’ve got three kids at home. We don’t know anything, we only know what we’re finding out off the news.”

The Scunthorpe site employs more than 3,000 of British Steel’s 5,000-strong workforce.

Martin Foster, 57, the Unite trade union convenor for the plant in Lincolnshire, who has been employed by the steelworks for most of his life, said: “I came in this morning and was genuinely scared and angry. It just feels like we’ve been thrown to the wolves. You’ve got to remember, Scunthorpe as a town didn’t exist until this place was created. The town was built around the steelworks, not the other way round.”

Scunthorpe’s iron and steel industry has been a cornerstone of the area since the mid-19th century. In 1967 the works were consolidated and nationalised as part of the British Steel Corporation, and in 1988 they were privatised and became part of Corus and later Tata Steel. Greybull Capital, a private investment firm that specialises in buying up struggling businesses, took over in 2016, renaming the firm British Steel.

Quick guide What went wrong at British Steel? Show Hide What plans does Jingye have for British Steel? Jingye's financial profile is relatively opaque, but the company is expected to pledge investment worth £1bn over the next decade. A person briefed on Jingye's thinking said the company wanted to preserve as many jobs as possible, but could not say how many of the company's 4,000 workers would keep their jobs. British Steel accounts for a third of UK production, so is seen as a key national asset in many quarters.

What went wrong at British Steel? When Greybull Capital bought British Steel in 2016 it promised great things. The private equity firm pledged to invest £400m and within months it was boasting of a return to profit and a bright future ahead. Three years later it collapsed. In a letter to staff, the British Steel chief executive blamed weak market demand, high raw material prices, the weakness of sterling and uncertainty over the outcome of Brexit discussions. Who is Jingye? Jingye emerged as the most likely owner after talks with Ataer, a division of the Turkish military pension fund Oyak, fell through in October. Founded in 1988 by a former Communist party official, Li Ganpo, the Chinese conglomerate has hotel and retail interests. However, steelmaking, which it started doing in the early 1990s, is now its primary focus: its Chinese mills produce about 15m tonnes of steel a year, exporting to 80 countries. How much is Brexit to blame? It is not the only factor in the crisis, but it is important and will remain crucial even if Jingye buys British Steel. Steel contracts are typically agreed well in advance of the product being delivered. As things stand, the UK is due to leave the EU on 31 January after another delay, and the terms of that separation are yet to be agreed, meaning British Steel’s overseas customers do not know what tariffs will apply to steel they buy from the company. Sources close to the company said orders from customers in the EU and further afield had dried up as a result. Is the whole UK steel industry in trouble? The UK steel industry has been in decline for some time because of a variety of factors such as overcapacity in EU steelmaking and Chinese state-subsidised firms flooding the global market with cheap product. An industry that employed 323,000 people in 1971 now employs less than a tenth of that, at 31,900. The closure of the Redcar steelworks in 2015 was a significant blow to the sector and left the UK with only two blast furnace steelworks: Scunthorpe and the Tata Steel-owned Port Talbot in south Wales.

Most residents fear that losing the factory will not just mean the loss of thousands of jobs but will deal a serious blow to the entire town.

Facebook Twitter Pinterest Celia Todd volunteers at the Well Cafe and comes from a family of steel workers. Photograph: Gary Calton/The Observer

Celia Todd, 64, who marched with the steelworkers in 2015 when the factory faced financial difficulty, said: “It upsets me because I’ve lived in Scunthorpe all my life and I’ve seen people going into the steelworks as young boys and come out as men. Some of them have been in there since they left school. It’s going to be like a ghost town if it closes.”

The factory is a huge complex on the outskirts of the town centre and its towering chimneys can be seen for miles. Its presence is embedded into the lifeblood of the town – the central shopping arcade is named The Foundry in homage to it.

John Fleming, 75, who owns a taxi firm in the town, said: “If the steelworks close down, this town would die. It’s the main employer in this town. We’ve opened a brand new technical college – what are they going to do if there’s no jobs going?”