Ministers are considering “all viable options” after Indian-headquartered Tata Group mooted selling its UK steel business.
A joint statement from the UK and Welsh Governments said they were both working “tirelessly” to look at ways of keeping the British steel industry strong.
Tata Steel said it had advised the board of Tata Steel Europe to consider selling Tata Steel UK after the business suffered 12 months of plummeting fortunes.
A statement from Tata Steel said it had asked its European board “to explore all options for portfolio restructuring including the potential divestment of Tata Steel UK, in whole or in parts”.
The UK and Welsh governments said: “This is a difficult time for workers in Port Talbot and across the UK. During the review process, we remain committed to working with Tata and the unions on a long-term sustainable future for British steel making.
“Both the Welsh and UK governments are working tirelessly to look at all viable options to keep a strong British steel industry at the heart of our manufacturing base.”
Tata Steel said trading conditions in the UK and Europe had rapidly deteriorated due to factors including global oversupply of steel; significant increase in imports; high manufacturing costs; weakness in demand; and volatile currency.
“These factors are likely to continue into the future and have significantly impacted the long term competitive position of the UK operations in spite of several initiatives undertaken by the management and the workers of the business in recent years,” it added.