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The familiar plume of smoke no longer billows from one of the two chimneys at ArcelorMittal’s massive steelworks in Hamburg’s harbour.

Soaring energy prices have forced operators to partially idle the plant, adding to fears that Germany’s industrial companies, the backbone of Europe’s biggest economy, are facing an existential threat.

Germany is already bracing for a recession as the energy crisis triggered by Russia’s war in Ukraine takes its toll, with the government on Wednesday forecasting a contraction of 0.4 percent in 2023.

But some economists say the long-term impact could run far deeper and see entire manufacturing sectors trim production or relocate to countries where running costs are lower, fundamentally reshaping Germany’s industrial landscape.

In Hamburg, the 530 workers at the ArcelorMittal steelworks have been placed on reduced hours since early October.

“Gas plays a crucial role in the (iron ore) reduction process” carried out at the plant, said Uwe Braun, CEO of ArcelorMittal Hamburg.

But the energy bill has risen “seven-fold” since Russia’s February invasion of Ukraine, he told AFP at the site, where activity was subdued and helmet-clad workers were spread out around the imposing 1970s steelworks.

The steep price increase made it unaffordable to continue business as usual at the site, which on average consumes two terawatt-hours of gas and one terawatt-hour of electricity per year — enough to power a medium-sized city.

Similar steps to curb production have been taken at other European sites operated by ArcelorMittal, the continent’s biggest steelmaker.

In a September statement announcing the cost-saving measures, the company blamed the “exorbitant” rise in energy prices and weaker demand as the global economic outlook darkens.

– ‘Broken’ –

Germany in recent decades managed to avoid the waves of de-industrialisation that hit other European countries.

Industrial production remains a pillar of the country’s economy and accounts for around 22 percent of gross domestic product (GDP), compared with around 13 percent in neighbouring France.

“Germany’s business model in a nutshell is buying cheap energy from Russia, raw materials and intermediate products… make some outstanding cars and machines… and export them” to the United States and China, said LBBW bank economist Jens-Oliver Niklasch. 

“Now, some of the tiles on the roof are broken,” he told AFP.

Alarm bells are ringing across Germany’s energy-hungry sectors, from steel to chemicals, glass, paper and ceramics production.

Chancellor Olaf Scholz’s government has unveiled a 200-billion-euro ($198 billion) energy fund to cushion the impact of price shocks on households and businesses, including a temporary cap on gas prices from next year.

Despite those efforts many experts agree that because of the severed ties to Russian imports, European energy prices are unlikely to return to their cheap pre-war levels anytime soon, if ever.

“We’ll see in the months ahead who can still afford to manufacture in Germany,” Arndt Kirchhoff of the family-owned Kirchhoff car parts supplier recently told Der Spiegel weekly.

– America beckons –

Outside ArcelorMittal’s Hamburg plant, a mound of iron ore pellets is piled high, awaiting the steelworks’ full resumption.

Before the crisis, the site produced one million tonnes of steel annually, mainly for Germany’s flagship automobile sector.

If nothing is done to drastically bring down energy costs, “it’s clear that some parts of the production process will be relocated”, said Braun.

Analyst Niklasch said it was not unthinkable that German industry would have to say goodbye to “its most energy-intensive branches”.

The United States, where gas prices remain low thanks to abundant domestic production, could be an attractive alternative, according to Niklasch.

But Stefan Kooths, of the IfW Kiel economic institute, said he didn’t expect a widespread exodus of industrial companies from Germany.

“The price of gas should stabilise in the medium term, even if the cost will remain higher than before the crisis,” he reasoned.

Britain’s beleaguered Prime Minister Liz Truss vowed Wednesday not to cut public spending, once again defending last month’s uncosted tax-slashing mini-budget that has sparked weeks of UK market turmoil.

Appearing in parliament for the first time since the contentious September 23 plans prompted economic upheaval, Truss said she was “absolutely” committed to pledges made during the summer’s Tory leadership campaign to maintain current spending.

With currency, bond and other markets spooked by the extra borrowing earmarked to pay for tax cuts, fears have grown that Truss will slash government department budgets, returning to the unpopular austerity policy of a decade ago.

But the 47-year-old leader insisted that would not happen, while doubling down on her tax plans and reducing debt. 

“What we will make sure is that over the medium-term the debt is falling,” Truss told MPs, in only her second “Prime Minister’s Questions” session in the House of Commons since succeeding Boris Johnson early last month.

“We will do that not by cutting public spending but by spending public money well,” she added. Her policies would “protect our economy”, she argued.

Truss also insisted her controversial economic package announced by Chancellor of the Exchequer Kwasi Kwarteng to reduce several different taxes would result in “higher growth and lower inflation”.

– ‘Lost in denial’ –

But the initial impact from it has been uniformly negative. The pound has plunged to unprecedented lows against the dollar, while government borrowing and mortgage rates have spiralled.

The Bank of England has been forced to make several emergency interventions in bond markets, while the economy unexpectedly shrank in August after slender growth the previous month amid a cost-of-living crisis and rocketing energy bills.

Labour leader Keir Starmer accused Truss of being “lost in denial” and “ducking responsibility” as she refused to acknowledge the economic fallout from her policies, instead blaming global factors such as the war in Ukraine for unsettling markets.

Media reports have suggested that the mini-budget — already watered down with the scrapping of plans to axe the top rate of tax — could be further revised during a line-by-line review.

But Truss’s spokesman rubbished the claims immediately after her weekly House of Commons questions.

“We are committed to the measures that the Chancellor set out in the growth plan,” he told reporters.

Truss was “firmly of the view that is the right approach to take to ensure we move away from low or no growth”, he added.

Striking French oil refinery employees voted Wednesday to maintain blockades now in their third week, despite a government order for some of them to return to work in a bid to get fuel supplies flowing.

The industrial action to demand pay hikes has paralysed six out of the seven fuel refineries in France, leading to shortages of petrol and diesel exacerbated by panic-buying from drivers.

Having previously threatened to use emergency powers enabling them to order essential workers back to the job, the government announced Wednesday that it would put them into use as the strikes entered their third week.

Personnel at a fuel depot at the Gravenchon-Port-Jerome refinery in northwest France, owned by US giant Esso-ExxonMobil, will be the first to be requisitioned, an official at the energy ministry told AFP. 

“Faced with the continuation of the strike by some of the personnel at Port-Jerome in Normandy, the government is launching the requisitioning of essential workers at the depot,” the official said.

Workers who refuse the summons will risk fines or jail time.

The government also said it would hold an emergency meeting on the crisis toward midday, as long queues of motorists desperately seeking fuel again blocked streets in Paris and other major cities.

As of Tuesday evening, 31 percent of stations across the country lacked at least one grade of fuel, a figure that stood at 44 percent in the greater Paris region.

Esther Berrebi, a home health aide in the capital, was hoping to find petrol at the third station she had tried since 7:00 am.

“I’m very angry, and very worried,” she told AFP. “I understand they want higher salaries but I don’t understand how they can halt an entire country.”

– Growing frustration –

The hard-left CGT union that is leading the stoppages had said Tuesday that any requisitioning would be “not necessary and illegal”, raising the spectre of legal challenges.

It is seeking a 10-percent pay rise for staff at TotalEnergies, retroactive for all of 2022, and says management had refused to engage in talks.

“It would have been easier to requisition our CEO and bring him to the negotiating table,” said Germinal Lancelin, the CGT leader for ExxonMobil at the Gravenchon-Port-Jerome refinery.

On Wednesday, TotalEnergies said it would meet with all union representatives, having previously insisted it would meet only those who accepted to end the blockades.

Until now, the government had been reluctant to inflame the conflict, but in recent days officials have had to acknowledge the growing frustration and economic damage caused by drivers spending hours to fill up.

“Petrol is too important for us. It’s been a nightmare for a week,” Santiago, a delivery driver, told AFP in Paris.

And even if key personnel are ordered back to get oil refineries working again, “it will take at least two weeks” to restore fuel supplies already under strain, said Gil Villard, a CGT representative for Esso at the refinery in Fos-sur-Mer, outside Marseille.

The crisis comes at a time of high energy prices and inflation, while TotalEnergies’ bumper profits have also caused anger, leading to calls for the group to face a windfall tax.

The stand-off could add impetus to a march planned by left-wing political parties on Sunday against the policies of President Emmanuel Macron and the high cost of living. 

“I hope this is the spark that begins a general strike,” leading Greens party parliamentarian, Sandrine Rousseau, told Franceinfo radio Wednesday.

The standoff also comes as Macron is preparing to push through a contentious pension overhaul by the end of the winter, despite warnings from some allies about the risk of widespread resistance.

Labour unions and left-wing political parties have vowed to try to block the reform, which would see the pension age raised to 64 or 65 for most people, from 62 currently.

The Bank of England on Wednesday insisted it would end emergency buying of UK bonds by the weekend but sent markets into further frenzy as economic uncertainty grips Britain.

The BoE launched a bond-buying drive in late September aimed at quelling market turmoil triggered by an uncosted budget unveiled by the government of new Prime Minister Liz Truss.

Following a Financial Times report on Wednesday that the BoE could extend its buying of UK government debt, the central bank insisted it would end purchases of long-dated bonds on Friday.

Amid all the uncertainty, the yield on Britain’s 30-year bond, or gilt, rose back above five percent and close to a 24-year peak.

“As the bank has made clear from the outset, its temporary and targeted purchases of gilts will end on 14 October,” the BoE said.

“Governor (Andrew Bailey) confirmed this position… and it has been made absolutely clear in contact with the banks at senior levels.”

The BoE noted, however, that measures to boost liquidity would remain in place beyond Friday.

The bank has jumped into bond markets to protect financial stability after yields rocketed and the pound tumbled to a record dollar-low following Britain’s tax-slashing budget.

In particular, the BoE feared for British pension funds that invest in traditionally low-volatility state bonds.

Speaking on the sidelines of an International Monetary Fund gathering in Washington, Bailey on Tuesday confirmed that pension fund managers had “three days left” until the bank’s bond purchases ended.

“We think the BoE has put itself in a no-win situation,” said Matthew Ryan, head of market strategy at financial services firm Ebury.

“Either Bailey is forced to backtrack on his pledge and extend intervention beyond Friday, potentially damaging the bank’s credibility, or end the measures as planned and risk another blowout in gilt yields.”

– ‘Bank sector resilience’ –

Separately, the BoE on Wednesday judged that Britain’s banks were “substantially more resilient” than before the 2008 global financial crisis thanks to strong capital and liquidity.

Nevertheless, the BoE this week launched a temporary facility aimed at easing liquidity pressures that arose after the UK budget shocked markets.

The BoE’s Temporary Expanded Collateral Repo Facility allows “banks to help to ease liquidity pressures facing” client funds beyond the end of this week, it said on Monday.

In volatile trading on Wednesday, the pound rallied above $1.10 as markets price in more aggressive interest-rate hikes from the BoE to try and cool decades-high inflation.

Official data on Wednesday showed an unexpected 0.3-percent contraction in the UK economy in August on surging prices.

The BoE’s emergency programme had offered to buy up to £65 billion ($72 billion) in long-dated bonds, although the current total is far below the limit.

On Tuesday, it widened the scope of its daily purchases of government bonds, or gilts, to include debt linked to the UK inflation rate, currently at around 10 percent.

In a bid to address markets chaos, finance minister Kwasi Kwarteng has brought forward UK growth and inflation forecasts to October 31, when he will also unveil plans to reduce debt.

His budget included a costly freeze on energy prices as millions of Britons struggle with a cost-of-living crisis.

But the International Monetary Fund and ratings agencies have warned that the budget would cause UK government debt to balloon.

Fitch last week lowered the outlook on its credit rating for British government debt to negative from stable.

The BoE has piled on further pressure by ramping up its main interest rate to a 14-year high of 2.25 percent in a bid to cool inflation — and is expected to hike even further next month.

Striking French oil refinery employees voted Wednesday to maintain blockades now in their third week, despite a government order for some of them to return to work in a bid to get fuel supplies flowing.

The industrial action to demand pay hikes has paralysed six out of the seven fuel refineries in France, leading to shortages of petrol and diesel exacerbated by panic-buying from drivers.

Having previously threatened to use emergency powers enabling them to order essential workers back to the job, the government announced Wednesday that it would put them into use as the strikes entered their third week.

Personnel at a fuel depot at the Gravenchon-Port-Jerome refinery in northwest France, owned by US giant Esso-ExxonMobil, will be the first to be requisitioned, an official at the energy ministry told AFP. 

“Faced with the continuation of the strike by some of the personnel at Port-Jerome in Normandy, the government is launching the requisitioning of essential workers at the depot,” the official said.

Workers who refuse the summons will risk fines or jail time.

The government also said it would hold an emergency meeting on the crisis toward midday, as long queues of motorists desperately seeking fuel again blocked streets in Paris and other major cities.

As of Tuesday evening, 31 percent of stations across the country lacked at least one grade of fuel, a figure that stood at 44 percent in the greater Paris region.

Esther Berrebi, a home health aide in the capital, was hoping to find petrol at the third station she had tried since 7:00 am.

“I’m very angry, and very worried,” she told AFP. “I understand they want higher salaries but I don’t understand how they can halt an entire country.”

– Growing frustration –

The hard-left CGT union that is leading the stoppages had said Tuesday that any requisitioning would be “not necessary and illegal”, raising the spectre of legal challenges.

It is seeking a 10-percent pay rise for staff at TotalEnergies, retroactive for all of 2022, and says management had refused to engage in talks.

“It would have been easier to requisition our CEO and bring him to the negotiating table,” said Germinal Lancelin, the CGT leader for ExxonMobil at the Gravenchon-Port-Jerome refinery.

On Wednesday, TotalEnergies said it would meet with all union representatives, having previously insisted it would meet only those who accepted to end the blockades.

Until now, the government had been reluctant to inflame the conflict, but in recent days officials have had to acknowledge the growing frustration and economic damage caused by drivers spending hours to fill up.

“Petrol is too important for us. It’s been a nightmare for a week,” Santiago, a delivery driver, told AFP in Paris.

And even if key personnel are ordered back to get oil refineries working again, “it will take at least two weeks” to restore fuel supplies already under strain, said Gil Villard, a CGT representative for Esso at the refinery in Fos-sur-Mer, outside Marseille.

The crisis comes at a time of high energy prices and inflation, while TotalEnergies’ bumper profits have also caused anger, leading to calls for the group to face a windfall tax.

The stand-off could add impetus to a march planned by left-wing political parties on Sunday against the policies of President Emmanuel Macron and the high cost of living. 

“I hope this is the spark that begins a general strike,” leading Greens party parliamentarian, Sandrine Rousseau, told Franceinfo radio Wednesday.

The standoff also comes as Macron is preparing to push through a contentious pension overhaul by the end of the winter, despite warnings from some allies about the risk of widespread resistance.

Labour unions and left-wing political parties have vowed to try to block the reform, which would see the pension age raised to 64 or 65 for most people, from 62 currently.

The pound rallied and UK government bond yields rose Wednesday, with the Bank of England accused of fuelling markets uncertainty.

The BoE said it would Friday end a short-term programme of bond-buying support aimed at quelling volatility triggered by a debt-fuelled UK budget.

The Financial Times earlier said the BoE stood ready to intervene further.

On Wednesday, the yield on the government’s 30-year bond returned above a relatively high level of five percent.

The UK government’s higher borrowing costs are a reflection of market unease regarding the affordability of upcoming tax cuts aimed at supporting Britain’s recession-threatened economy.

The pound rose against the dollar as traders bet on more aggressive interest rate hikes from the BoE on concerns the budget of uncosted tax cuts would further fuel sky-high UK inflation.

“Markets have gyrated overnight and this morning, following seemingly conflicting messages purportedly from the Bank of England in relation to the time-line of the current temporary UK government bond purchases,” noted BNP Paribas analyst Chris Lupoli.

London’s benchmark FTSE 100 index dropped slightly, with sentiment dampened by news that the UK economy unexpectedly shrank in August.

Investors are struggling to find some solace as they navigate a range of crises that threaten the global economy, from soaring prices and bumper interest rate hikes to the Ukraine war and China’s Covid-induced growth slowdown.

The gloom was summed up by the International Monetary Fund, which on Tuesday highlighted the risks of inflation and the conflict in Europe as it slashed its global growth forecast and warned: “For many people 2023 will feel like a recession”.

Later, US President Joe Biden admitted there was a chance the country could suffer a “slight” recession.

Investors are now nervously looking ahead to Thursday’s US inflation report, with observers warning that a strong reading could spark another rout on markets.

Even if it showed inflation cooling from a four-decade high, analysts said the Fed would not likely take the single reading as reason to slow down its pace of rate hikes.

Aggressive US rate hikes pushed the dollar to a 24-year high against the yen Wednesday, also as Japan’s central bank holds off from hiking its own borrowing costs.

– Key figures around 1100 GMT –

London – FTSE 100: DOWN 0.1 percent at 6,878.50 points

Frankfurt – DAX: UP 0.2 percent at 12,243.18

Paris – CAC 40: UP 0.2 percent at 5,842.54

EURO STOXX 50: UP 0.3 percent at 3,348.95

Tokyo – Nikkei 225: FLAT at 26,396.83 (close)

Hong Kong – Hang Seng Index: DOWN 0.8 percent at 16,701.03 (close)

Shanghai – Composite: UP 1.5 percent at 3,025.51 (close)

New York – Dow: UP 0.1 percent at 29,239.19 (close)

Pound/dollar: UP at $1.1083 from $1.0972 Tuesday

Dollar/yen: UP at 146.49 yen from 145.83 yen

Euro/dollar: UP at $0.9717 from $0.9709

Euro/pound: DOWN at 87.70 pence from 88.46 pence

Brent North Sea crude: UP 0.6 percent at $94.81 per barrel

West Texas Intermediate: UP 0.2 percent at $89.51 per barrel

Striking French fuel refinery workers voted Wednesday to continue their stoppages and blockades, defying the government which began ordering some of them back to work in a bid to get supplies flowing.

Industrial action to demand pay rises has paralysed six out of seven fuel refineries in France, leading to shortages of petrol and diesel exacerbated by panic-buying from drivers.

Having previously threatened to use emergency powers enabling them to order essential workers back to the job, the government announced Wednesday that it would put them into use as the strikes entered their third week.

Personnel at a fuel depot at the Gravenchon-Port-Jerome refinery in northwest France, owned by US giant ExxonMobil, would be the first to be requisitioned, an official at the energy ministry told AFP. 

“Faced with the continuation of the strike by some of the personnel at Port-Jerome in Normandy, the government is launching the requisitioning of essential workers at the depot,” the official said.

Workers who refuse the summons will risk fines or jail time.

The right-wing government of former president Nicolas Sarkozy invoked the same powers in 2010 to break a refinery strike.

– Growing frustration –

The hard-left CGT union that is leading the stoppages had said Tuesday that any requisitioning would be “not necessary and illegal”, raising the spectre of legal challenges.

It called requisitioning the “choice of violence”, adding that it would lead the union to suspend “its participation in meetings with the government and business leaders during this period”.

Until now, the government had been reluctant to inflame the conflict but was also aware of growing frustration and economic damage caused by drivers spending hours to fill up.

“Petrol is too important for us. It’s been a nightmare for a week,” Santiago, a delivery driver, told AFP in Paris. 

The crisis comes at a time of high energy prices and inflation, while TotalEnergies’ bumper profits have also caused anger, leading to calls for the group to face a windfall tax.

The CGT wants a 10-percent pay hike for staff at TotalEnergies. 

The stand-off could add impetus to a march planned by left-wing political parties on Sunday against the policies of President Emmanuel Macron and the high cost of living. 

“I hope this is the spark that begins a general strike,” leading Greens party MP, Sandrine Rousseau, told Franceinfo radio Wednesday. 

Macron is looking to push through a highly contentious pension reform by the end of the winter despite warnings from some allies about the risk of strikes and demonstrations.

Labour unions and left-wing political parties have vowed to try to block the reform, which would see the pension age raised to 64 or 65 for most people, from 62 currently.

The pound swung between gains and losses Wednesday after the Bank of England confirmed it will end its support for financial markets at the end of the week.

The news dealt a blow to investors who had been buoyed by a report that the BoE had pledged to lenders it would continue to provide cash if needed after Friday’s deadline.

Asian stocks and the pound started the day under pressure after the UK central bank on Tuesday warned markets it would end to a near two-week programme of support aimed at quelling volatility sparked by the government’s debt-fuelled tax-cutting mini-budget.

Later in the day, there was a spark of optimism that it would act as a backstop after the report in the Financial Times saying it had tried to reassure banks. 

However, the mood changed again as the European day began after BoE officials said the Friday deadline remained.

Sterling moved in a wide range in Asia on the news, from a low of $1.0924 to a high of $1.1057.

Equities in Asia also saw big moves, with markets ending mixed.

Hong Kong endured a three percent swing between gains and losses before ending in the red, while Singapore, Wellington, Taipei and Jakarta were also down.

However, Shanghai, Sydney, Seoul, Manila, Mumbai and Bangkok edged up and Tokyo was flat.

The FTSE in London was also down, with sentiment also dampened by news that the UK economy unexpectedly shrank in August.

“Stepping away as the buyer of last resort is not great for risk or sterling,” said SPI Asset Management’s Stephen Innes after Tuesday’s BoE announcement.

“At the end of the day, UK economic issues, fiscal irresponsibility, and a hawkish Fed will linger. So do not be surprised by a pickup in pound volatility and for a continued move lower as well.”

– Range of crises –

Investors are struggling to find some solace as they navigate a range of crises that threaten the global economy, from soaring prices and bumper interest rate hikes to the Ukraine war and China’s Covid-induced growth slowdown.

The gloom was summed up by the International Monetary Fund, which on Tuesday highlighted the risks of inflation and the conflict in Europe as it slashed its global growth forecast and warned: “For many people 2023 will feel like a recession”.

Later, US President Joe Biden admitted there was a chance the country could suffer a “slight” recession.

Investors are now nervously looking ahead to Thursday’s US inflation report, with observers warning that a strong reading could spark another rout.

Still, analysts said the Fed would not likely take a single positive reading as a reason to slow down its pace of rate hikes as it lasers in on bringing inflation down from four-decade highs.

“I don’t see any imbalances yet that would cause a pivot from the Fed,” said Citigroup’s Veronica Clark on Bloomberg Television.

“The Fed will pay attention to global financial stability concerns, a strong dollar is part of that, but it’s ultimately going to be domestic conditions and what the Fed is seeing on inflation.”

The yen clawed back losses against the dollar, having fallen to a new 24-year low and breaking the level touched last week when Tokyo stepped into the market to support the Japanese unit.

Recession fears and China’s Covid-linked economic woes also kept oil prices in check, after they surged last week on an outsized OPEC output cut, with many warning that demand will plunge as people refrain from spending.

– Key figures around 0810 GMT –

Tokyo – Nikkei 225: FLAT at 26,396.83 (close)

Hong Kong – Hang Seng Index: DOWN 0.8 percent at 16,701.03 (close)

Shanghai – Composite: UP 1.5 percent at 3,025.51 (close)

London – FTSE 100: DOWN 0.2 percent at 6,873.21 (close)

Pound/dollar: DOWN at $1.0970 from $1.0972 Tuesday

Dollar/yen: UP at 146.22 yen from 145.83 yen

Euro/dollar: UP at $0.9711 from $0.9709

Euro/pound: UP at 88.48 pence from 88.46 pence

West Texas Intermediate: UP 0.1 percent at $89.43 per barrel

Brent North Sea crude: UP 0.4 percent at $94.65 per barrel

New York – Dow: UP 0.1 percent at 29,239.19 (close)

The launch of a Japanese rocket taking satellites into orbit to demonstrate new technologies failed after blast-off on Wednesday because of a positioning problem, the country’s space agency said.

It was Japan’s first failed launch in nearly two decades, and the only one for an Epsilon rocket, a solid-fuel model that has flown five successful missions since its 2013 debut.

The unmanned craft took off from Uchinoura Space Center in the southern Kagoshima region, with its lift-off livestreamed by the Japan Aerospace Exploration Agency (JAXA).

But a self-destruct signal was sent to the rocket less than 10 minutes later because of “positioning abnormalities”, said Yasuhiro Funo of JAXA, who led the project.

The livestream was halted and presenters wearing hard-hats told viewers there had been a problem with the launch.

Funo explained at a press conference that a technical issue was detected before the third — and final — stage of the launch, just as the last powerful booster was about to be ignited.

“We ordered the rocket’s destruction because if we cannot send it into the orbit that we planned, we don’t know where it will go,” he said, leading to safety concerns about where the machinery could fall.

After the mission was aborted, the rocket’s parts were assumed to have landed in the sea east of the Philippines, he added.

Japan’s last failed space launch was of a pair of spy satellites to monitor North Korea in 2003, and the only other time JAXA has sent a destroy order to a rocket was in 1999.

– ‘Pulsed-plasma thruster’ –

The 26-metre (85-foot) Epsilon-6 rocket had been carrying a box-shaped satellite due to orbit Earth for at least a year to carry out experiments, as well as eight micro-satellites.

Researchers and private companies had engineered new technologies to be tried out in space as part of the agency’s third Innovative Satellite Technology Demonstration programme.

Their gadgetry ranged from a “pulsed-plasma thruster” to an experiment in “harvesting energy with (a) lightweight integrated origami structure”, according to a JAXA fact sheet.

JAXA describes Epsilon as “a solid-fuel rocket designed to lower the threshold to space… and usher in an age in which everyone can make active use of space”.

It is smaller than the country’s previous liquid-fuelled model, and a successor to the solid-fuel M-5 rocket that was retired in 2006 due to its high cost.

JAXA president Hiroshi Yamakawa apologised for Wednesday’s failure, saying the agency was “terribly sorry that we couldn’t meet the Japanese people’s expectations”.

“We will pour efforts into finding out the cause and will take counter-measures” to prevent a recurrence, Yamakawa said.

Japan’s space programme is one of the world’s largest, and last week JAXA astronaut Koichi Wakata flew to the International Space Station as part of the Crew-5 mission.

JAXA has also been in the spotlight after its mission to the asteroid Ryugu by a space probe named Hayabusa-2, which collected pristine material from the celestial body that is now being analysed for clues to the origins of life.