UK election delays important steel quota decision

Spanish Market: Metals
03/06/24

Important decisions over UK hot-rolled coil (HRC) import quotas appear to have been delayed by the calling of a general election.

The Trade Remedies Authority initiated its suspension review into HRC import quotas on 9 February, in response to requests from Tata Steel and trading firm Kromat. Tata's decision to switch off its Port Talbot blast furnaces this year and feed its rolling mills with imported substrate means that the UK will need to procure much more third-country HRC, so the current quotas are significantly lower than required.

When the TRA initiated its suspension review in February, it said it would draft its initial findings in March and send its recommendation to the minister in April. It anticipated that the suspension would be approved in May, when it would come into force immediately. The TRA has made its recommendation, but the government has yet to reach a decision on the important matter — a decision the market has been awaiting for months.

The government has until the end of this month to decide on the recommendation until it expires. The Department of Business and Trade refused to comment on a "live" trade remedies case.

Uncertainty over what may happen with the quota, and how the suspension could affect the market, has weighed heavily for months. The "other countries" quota for April-June, set at just 22,589t, was exhausted on 20 May.

The "other countries" quota, in which Indian material is included, has been exhausting quickly upon reopening in recent months, given the increase in imports contributed to by Tata Steel. Data from intelligence platform Kpler suggest a 33,000t cargo is en route from Paradip in India to Newport in Wales for 15 July arrival. Around 17,000t of Indian coil discharged at Newport on 5 June.

Tension over the "other countries" quota has prompted a scramble for material that is currently not subject to quotas, namely from Vietnam and to a lesser extent Egypt. The SSI Nemesis is en route from Thi Vai in Vietnam to Liverpool carrying around 11,650t of coil, for discharge on 18 June. And the Bao Run discharged around 16,000t of coil at Liverpool last month, also from Thi Vai, according to shipping data.

The Bulk Independence unloaded over 54,000t of Egyptian steel at Port Talbot, Wales, on 23 May, according to Kpler. One mill-allied trader was offering Egyptian coil at competitive prices around a month ago.

By Colin Richardson

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