UK Steel Market Participants Urged to Engage with Import Quota Consultation
The UK steel market is being called upon to have its say on the current steel import quota system, which some critics say creates a quarterly “python swallowing a goat” scenario.
At UK Metals Expo 2023, International Steel Trade Association (ISTA) president Godfrey Watt raised concerns during a debate hosted by Kaye Ayub of MEPS International.
The UK government recently opened a consultation on the extension of its steel import safeguard measures. Watt emphasised it is vital for market participants to contribute their views:
“When you have quotas expiring quarterly, you get a surge of imports as people worry about exceeding limits and facing a 25% duty. It’s like a python swallowing a goat – a lump, then nothing, then another lump. It’s damaging to the supply chain and needs addressing.”
The full panel debate, Carbon Steel Market: Navigating Trends and Price Dynamics, is now available on-demand via the UK Metals Expo website.
Decarbonisation and the Impact of CBAM
Panel participants also discussed the EU’s incoming Carbon Border Adjustment Mechanism (CBAM) and the urgent need to decarbonise UK steel production. Speaking just before the UK government announced a £500 million support package for Tata Steel’s transition to electric arc furnaces, Tata Steel UK’s Head of Strategic Marketing, Chris Wooffindin, said:
“We need a decarbonised steel offering in the UK. Our customers demand it, and local domestic supply will be a major advantage for UK PLC.”
Paul Murphy of Brown McFarlane commented that the UK government was “still behind the curve” compared to EU initiatives, and Wooffindin warned about the ongoing challenge of high UK energy costs affecting production decisions.
The panel agreed that CBAM will have cost implications once reporting begins on 1 October 2024. Although no immediate tariffs or fines are planned, Murphy pointed out:
“The bottom line is there’s going to be a price increase somewhere.”
Van Leeuwen’s Managing Director, Kristian Bowling, took a more positive view, saying:
“If done properly, CBAM will benefit the UK steel industry by discouraging production relocation to low-regulation countries.”
Wooffindin urged importers to prepare for the onerous data requirements now to avoid penalties later.
Carbon Steel Market Outlook
Looking ahead, the panellists predicted that major elections in the US and UK, interest rate changes, and automotive sector trends (including delays to EV adoption targets) would strongly influence the steel market’s recovery timeline.
Wooffindin concluded:
“2024 will be a transitional year. We expect real demand to pick up from 2025 onwards.”
Source: MEPS International
