More than 400 jobs at steel maker face axe as energy crisis grows

More than 400 jobs at British steel producer Liberty Steel face the axe due to the sector’s “severe competitiveness issues”.

The UK’s third largest steel producer said it was reducing primary production at its plant in Rotherham and idling its Newport plant, while turning another plant in Bromwich into a sales and distribution hub.

The firm said the measures, announced in a four-point restructuring plan, would “create an entity positioned to better withstand challenging market conditions”.

Up to 440 of the group’s 3,000 UK roles may be impacted, with affected staff to be offered retraining and redeployment on their previous salaries “when market conditions allow”.

It comes two days after the government downgraded its support for businesses’ energy bills, including energy intensive industries such as steel.

Industry group UK Steel criticised the move for allowing countries with more generous support schemes such as Germany to undercut UK producers.

Although gas prices have halved since September and are now lower than they were before Russia’s invasion of Ukraine, the market remains highly volatile and prices are still up to four times higher than the historical average.

Liberty Steel also said it was being outcompeted by imports from countries with less stringent environmental standards.

The group’s chief transformation officer Jeffrey Kabel said the restructuring will allow the firm to “adapt quickly to challenging market realities”.

“The support of our marquee customers will enable us to produce high value, differentiated products through 2023 and beyond for strategic sectors such as aerospace, defence and energy,” he said.

“We remain committed to our longer-term growth plans in the UK including our plan to grow Rotherham into a 2 million tonne green steel hub.

“While our action is expected to regrettably impact the roles of some of our workforce we will provide a level of guaranteed salary and out placement opportunities through our unique Workforce Solutions programme as an alternative to redundancy.

“Liberty’s shareholder Sanjeev Gupta has supported the business through a very difficult period and remains committed to the workforce here in the UK and ensuring our lower carbon operations help deliver a sustainable, decarbonised UK steel industry.”

The firm said it would now focus on high value alloy steel production at its sites in Rotherham, Stocksbridge and Brinsworth to serve strategic aerospace, energy and engineering supply chains.

Businesses’ energy bills are capped under the government’s current support scheme but this will end in March and be replaced by a discount on wholesale energy prices.

The new package has been capped at a total cost of £5.5bn for 12 months, compared to the £18.4bn for six months which the current scheme is estimated to cost.

Chancellor Jeremy Hunt described the current package as “unprecedented in its nature and huge scale” and said the government had been clear that such levels of support were “time-limited and intended as a bridge to allow businesses to adapt”.

UK Steel has said the Treasury was betting on a “calm and stable 2023 energy market in a climate of unstable global markets”.

Last month Germany legislated for a support scheme worth an estimated €100bn (£88bn) which will start in March.