Another government takeover in the steel industry is on the cards. Lawyers told a court hearing yesterday (20 August) that the Department for Business and Trade (DBT) is preparing to intervene at a major steelworks in South Yorkshire.
Also in today’s trade news, the UK experienced a month of growth in one important industry metric, while Japan suffered a major decline in exports to the US and China. The UK government has also announced a crackdown on a cryptocurrency exchange used for sanctions evasion.
Government eyes steel takeover
A court has been told that the UK government is preparing to take control of the UK’s third largest steelworks.
According to the BBC, managers have been lined up to take over Speciality Steels UK (SSUK) in South Yorkshire. SSUK is owned by Liberty Steel and employs 1,450 people.
SSUK’s creditors sought a winding-up order against the company on Wednesday (20 August), producing a letter from the Department of Business and Trade (DBT) which showed that the government’s official receiver was willing to step in, according to the Guardian. The case has been referred to the High Court.
Liberty Steel is run by metals tycoon, Sanjeev Gupta, who is seeking to keep control of the insolvent company and is seeking a ‘pre-pack administration’ to keep control of SSUK.
This would be the second government takeover of a UK steel plant, if confirmed, after the government took control of British Steel in order to protect the blast furnaces at Scunthorpe in April.
A spokesperson for DBT told the Daily Update that the department was closely monitoring developments around Liberty Steel:
“We are supporting the Official Receiver so that they are prepared to take the necessary steps should the company enter into compulsory liquidation.”
UK economy
The UK’s flash S&P Purchasing Managers’ Index (PMI) showed that private sector output accelerated to its fastest rate for 12 months.
According to data released today, new business volumes expanded at the fastest rate since October 2024. However, inflation and employment were worrying points, according to survey respondents.
The index showed that the UK registered a 53.0 rating overall, above July’s 51.5, with strong gains in the services sector offsetting a slight decline in manufacturing. Any PMI score above 50 indicates economic growth. The flash PMIs are an early estimate, with a full report expected later this month.
S&P’s chief business economist, Chris Williamson, said that the data showed that economic growth “has continued to accelerate over the summer after a sluggish spring”.
Japan Exports
In July, Japanese exports plunged by 2.6%, as shipments to two of its biggest markets – the US and China – dried up.
Exports to the US slumped by 10.1% in July, falling for the fourth straight month, as a result of declining automotive sales, according to Japan Today. This slump came on top of an 11.4% fall in Japanese exports to the US in June.
The results were a sharper fall than the 2.1% predicted by a Reuters poll of economists, and came on top of a 0.5% decline in June.
The numbers came despite a strong period of growth in Q2 of this year, with a 0.3% boost in GDP. However senior economist at the Sompo Institute Plus, Masato Koike, warned that Japan could still enter a recession later this year, depending on the impact of tariffs, according to CNBC.
Sanctions crackdown
The foreign office has launched a crackdown on sanctions evasion. According to a government statement, the UK has slapped sanctions on Kyrgyzstan-based Capital Bank, and its director, as well as a pair of crypto currency exchanges: Grinex and Meer.
The government said that the exchanges were used specifically to evade Western sanctions, with the A7A5 cryptotoken used to move US$9.3bn in just four months.
Sanctions minister, Stephen Doughty, said that “if the Kremlin thinks they can hide their desperate attempts to soften the blow of our sanctions by laundering transactions through dodgy crypto networks – they are sorely mistaken”.
“These sanctions keep up the pressure on Putin at a critical time and crack down on the illicit networks being used to funnel money into his war chest.”
Also in the news:
· China has lodged a dispute against Canada with the WTO over Canadian surcharges on steel and aluminium products imported from China
· E-commerce platform Etsy has released guidance on tariffs, warning that the removal of the de minimis exemption means that goods entering the US may now be subject to new duties
· Sony has raised the price of the PlayStation 5 in the US as a result of a “challenging economic environment”. No other price changes were announced for other markets.
· DBT has announced an additional £30m in support for Northern Irish technology and science sectors, as industry minister Sarah Jones visits Belfast to highlight the investment
· UK businesses have urged the government to intervene, as new 25% tariffs on steel and aluminium hit British products
Yesterday in trade
· Our Export Controls Brief looked at how US president Donald Trump has been approaching controls and sanctions, with experts warning of the security implications of his semiconductor policies
· DBT secretary, Jonathan Reynolds, is set to visit Beijing this September as part of a reset of UK-Chinese relations.
· The UK’s Consumer Prices Index (CPI) rose 3.8% in the 12 months to July this year, marking the largest increase since January 2024.
You can read more of yesterday’s trade news here.
