UK steelmakers are concerned about potential trade diversion from the US and EU and are pushing for rapid measures to curb imports, sources suggest.
The US is imposing 25pc tariffs on 12 March, while the EU steel safeguard review is expected to meaningfully reduce import volumes. As a result, UK Steel, which represents mills, told Argus current import quotas have been "liberalised year after year when UK steel demand has been shrinking, so there is real concern that the protection offered is not adequate".
"We are reviewing options for tightening our current safeguards and working on a proposal to government for continued protection from trade diversion following the eventual expiry of steel safeguards," it added.
One of the potential options could be a blanket tariff on all imports, outside of hot-rolled coil (HRC) for downstream processing. This could be the quickest and most viable solution to the threat of diversion, given the time it can take to adjust quota volumes, according to some sell-side sources.
Atypical HRC suppliers have started offering into the UK recently, potentially because of the uncertainty surrounding the EU safeguard review and the ongoing dumping investigation against Egypt, Japan, India and Vietnam. Japanese HRC has recently been offered at about £500/t ddp West Midlands, when it is not typically seen in the market. Korean HRC has also been offered. Korean cold-rolled coil, and hot-dip galvanised in particular, have been offered at aggressive prices for a number of months.
"This government will not allow the end of steelmaking in the UK, which is why we've committed up to £2.5bn of investment to rebuild the industry, while our plant for steel consultation will examine the long-term issues facing the industry," a Department for Business and Trade spokesperson said.
The business secretary and industry minister continue to meet with the industry to "secure a green steel transition that's right for the workforce", the spokesperson added. Any blanket tariff could be justified on the grounds of national security or decarbonisation, sources suggest. In the case of the latter, it is not clear how less pollutant steel should be handled, or how you classify material rolled from blast furnace-based semi-finished steel in other regions.
