'Scunthorpe could become a disaster town if the steelworks close'
He added: "It's still difficult to digest but we will just keep going, doing our bit and seeing what happens."
The BBC previously reported that British Steel was expecting a £1bn injection from the government to keep the business going, but it was offered £500m and rejected it.
British Steel chief executive Zengwei An said the launch of the consultation process was "a necessary decision given the hugely challenging circumstances the business faces".
The consultation will look at the options of ending operations by early June, in September, or at a later date.
Sandra Donnelly, from alterations shop Sew Easie, said the closure would affect every business and could lead to Scunthorpe becoming a "disaster town".
She said: "People will be out of work – where are they going to get their jobs from?
"There's just not the jobs here to jump into.
"The steelworks are our main way of employing people. We've got nothing left – we've lost everything."
Patricia Fox, owner of Vanity Fayre hairdressers, is also worried.
She said: "We are a small business who cut people's hair who work there. If people won't be able to afford to come to us, everyone is going to suffer."
Scunthorpe United FC chairwoman Michelle Harness described the news as "devastating".
She said: "I'm sure the town will rally round the steelworkers.
"We have a large percentage of fans who are steelworkers and families of steelworkers, and there is a lot of history in the town.
"The town has to now find future jobs as it will affect so many other businesses – there will be a ripple effect from this closure."
Listen to highlights from Lincolnshire on BBC Sounds, watch the latest episode of Look North or tell us about a story you think we should be covering here.
