NASS: UK importers fight HMRC retroactive safeguard duty billing
Hundreds of UK steel companies are urgently seeking to resolve an ongoing dispute with tax authority HMRC after being retroactively billed millions of pounds for safeguard duties, Kallanish learns.
The issue has been highlighted by steel service centre industry association NASS in its end of year statement, written by its director general, Ian Darby.
“As you may or may not be aware, NASS/[International Steel Trade Association] ISTA/[British Stainless Steel Association] BSSA and [Confederation of British Metalforming] CBM have all been supporting many of their members in a £41 million two-year later, late claim for duty payable on such safeguards. The fight is still going on and we are still hopeful that something can be done,” Darby says.
Various instances occurred where companies imported product for clearance in a quarter that had allocation remaining, but these tonnes were transferred into the following quarter before the material was cleared. This resulted in importers being charged a duty even though the allocation had not been fully exhausted for that quarter, only transferred forward.
Darby tells Kallanish that some of the quotas had indeed been extinguished, and that the industry fully supports the need for the safeguards. But these claims were received some two years after the paperwork was seen and cleared by HMRC using its Customs Handling of Import and Export Freight (CHIEF) system. The companies being asked to pay the duty will have already traded the product on at the original price on the customs paperwork, assuming that the duty was not payable.
HMRC is only allowing claims back into the final open quarter even though there is still plenty of quota available, he adds.
Darby has been working to highlight and resolve the issue for more than a year.
The four industry groups recently met with steel importers and Weightmans Solicitors to tackle HMRC’s demands regarding the DTY override code due to difficulties with the CHIEF system.
The CHIEF system was replaced by the Customs Declaration Service (CDS) in late 2022 and into 2023.
Darby and Weightmans are now calling for others to come forward to join the group action, with an email sent out to members. A group action against HMRC’s claims will provide a stronger amount of collective evidence, enable those involved to share legal costs, and highlight the widespread issue, he adds.
“At various times since mid-2022 HMRC have contacted individual companies and made demands for safeguarding duty and import VAT. In some instances, this has been almost three years after the imports were cleared for circulation,” Darby wrote in the email seen by Kallanish.
The issue was also recently raised during a debate on business confidence held in parliament on 12 December.
Member of Parliament Sarah Coombes said: “Steel manufacturing is a vital West Midlands industry, but business confidence is being dented by retrospective charging of steel safeguarding duties by HMRC. Companies affected in her West Bromwich constituency and elsewhere feel these were unfairly and wrongly imposed on them during the chaotic Brexit transition period.”
“They tried to work with the last government but got nowhere on it. Given the importance of the steel sector to British industry, would the minister work with the treasury to resolve this issue and make sure these vital businesses are protected from hefty bills which should never have been charged in the first place?” she asked.
Jonathan Reynolds, MP and Secretary of State for Business and Trade, said he could “understand, in terms of the sums of money involved, why that is such a substantial issue for businesses in her constituency. The issue does relate to the duties that were charged at a time of significant political uncertainty; while it’s a treasury issue and relates to taxation, I can promise her we’ll get her the meeting she needs and work with her to ensure she’s getting the answers she is requesting for her constituents.”
Darby adds in his end of year statement that a new round of hot rolled coil safeguards came into place on 1 October. It took 40 days for the processes to come into place to register the imports. This highlights the problems being faced since Brexit, he says.
He adds that some steel processors are still waiting for HMRC to give them access to the new quota, while Tata Steel has allegedly already imported over 1.3 million tonnes of HRC.
Carrie Bone UK
ArcelorMittal to close two more French distribution centres
ArcelorMittal’s Distributions Solutions France confirms to Kallanish the permanent closure of two additional distribution hubs located in Strasbourg and Valence, eastern France.
The steelmaker has communicated to its employees and labour unions a strategy to restructure and reorganise its operations in light of the ongoing crisis.
“The difficult economic climate in the steel markets is weighing on its customers’ sectors of activity, particularly in local distribution for building, mechanical engineering, and general industry. This translates into a significant and lasting drop in volumes, of around 19% between 2019 and 2024, which is affecting the company’s results,” an ArcelorMittal Distributions Solutions France note explains.
The firm plans to redeploy the Valence and Strasbourg sites’ activities to neighbouring branches. The move could cut up to 28 jobs on the one hand, and create 15 on the other. Management is continuing the information-consultation process with employee representatives, with the next meeting scheduled for Wednesday.
ArcelorMittal’s French service centre division – CSE – announced last month the closure of the Reims and Denain flat products service centres in northern France. Reims and Denain will lay off a total of 135 workers, including 113 in Reims, 21 in Denain and one in Ottmarsheim. However, the steelmaker reports the creation of 19 jobs at other sites as the closures of the two facilities will sustain activity at other production sites.
Meanwhile, the steelmaker is pausing decarbonisation investments at its Dunkirk facility in northern France due to the downturn in the global steel industry “We are operating in a difficult market, and there are a number of policy uncertainties that are impacting the industry. We need an effective Carbon Border Adjustment Mechanism, as well as more robust trade defence measures, to strengthen the business case,” a company spokesperson said last month.
Natalia Capra France
EU launches Chinese high-pressure steel cylinder anti-dumping probe
The EU has initiated an anti-dumping proceeding concerning imports of high-pressure seamless steel cylinders from China, Kallanish notes.
The complaint was lodged on 24 October by five companies representing the EU high-pressure seamless steel cylinders industry, including Cylinders Holding, Dalmine, Eurocylinder Systems (ECS), Faber Industrie, and Worthington Cylinders.
The product subject to the investigation is high-pressure seamless cylinders for compressed or liquefied gas, made of steel, of all diameters and volume capacities, whether or not threaded, regardless of internal coating or plating, external finishing, or shape. This includes cylinders with or without a gas bladder inserted and those fitted with a valve, neck ring, foot ring, or piping, whether or not fastened together to form a bundle.
Non-refillable cylinders with capacities up to and including 120 ml, covered by European standard EN 16509:2014 and/or assigned UN-number 2037 by the United Nations Committee of Experts on the Transport of Dangerous Goods, are excluded from the product scope.
The product is currently classified under CN codes ex 7311 00 11, ex 7311 00 13, ex 7311 00 19, and ex 7311 00 30 (TARIC codes 7311 00 11 15, 7311 00 11 80, 7311 00 13 15, 7311 00 13 80, 7311 00 19 15, 7311 00 19 80, 7311 00 30 15, and 7311 00 30 80).
According to evidence cited in the complaint, steel billet (accounting for 32% of the product’s production cost), plate (33%), and seamless tubes (34%) are subject to the removal of VAT rebates on exports, potentially leading to prices significantly below those in international markets.
The investigation of dumping and injury will cover the period from 1 October 2023 to 30 September 2024. The examination of trends relevant for assessing injury will span the period from 1 January 2021 to the end of the investigation period.
Elina Virchenko UAE
US finalises AD dumping order on Belgian plate
The US Department of Commerce finds that Industeel Belgium sold carbon and alloy cut-to-length (CTL) plate in the US at less than normal market value, Kallanish learns from the Federal Register.
Commerce sets the weighted average dumping margin for Industeel sales at 2.52% for the CTL plate it sold under market value during the period of review, May 2022 through April 2023.
The subject goods are usually classified under the Harmonized Tariff Schedule of the US (HTSUS) classification numbers 7208.40.3030, 7208.40.3060, 7208.51.0030, 7208.51.0045, 7208.51.0060, 7208.52.0000, 7211.13.0000, 7211.14.0030, 7211.14.0045, 7225.40.1110, 7225.40.1180, 7225.40.3005, 7225.40.3050, 7226.20.0000, 7226.91.5000, 7208.40.6060, 7208.53.0000, 7208.90.0000, 7210.70.3000, 7210.90.9000, 7211.19.1500, 7211.19.2000, 7211.19.4500, 7211.19.6000, 7211.19.7590, 7211.90.0000, 7212.40.1000, 7212.40.5000, 7212.50.0000, 7214.10.0000, 7214.30.0010, 7214.30.0080, 7214.91.0015, 7214.91.0060, 7214.91.0090, 7225.11.0000, 7225.19.0000, 7225.40.5110, 7225.40.5130, 7225.40.5160, 7225.40.7000, 7225.99.0010, 7225.99.0090, 7226.11.1000, 7226.11.9060, 7226.19.1000, 7226.19.9000, 7226.91.0500, 7226.91.1530, 7226.91.1560, 7226.91.2530, 7226.91.2560, 7226.91.7000, 7226.91.8000 and 7226.99.0180.
Kristen DiLandro USA
HRC prices stabilize in Europe ahead of festive period; market digests news about safeguards review
Although, news about safeguards review sparked hopes for price recovery in longer run.
On Tuesday, the European Commission have started another review of existing steel safeguards measures, only a few months after the previous review came into force.
Market participants in Europe suggested that the review might involve a reduction in quarterly HRC quota allowances and the introduction of new individual quotas for certain origins.
Sources suggested that, in the mid-run, it might support a rebound in European prices.
“We are heading into [an] era of global trader wars and growing protectionism. Looks like reliance on domestic mills will only increase in 2025,” a buyer in Italy said.
“The first quarter of 2025 might be a bit early for flat steel prices rebound, but later in the year we will see better prices, in view of the reduced imports and reduced availability,” a buyer in the Benelux region said.
In Northern Europe, suppliers closed January order books, but deal prices have been lagging sometimes way behind target offer prices, sources told Fastmarkets.
Notably, in the middle of December, trading has picked up slightly on limited restocking. This was not a result of improved demand or an economic upturn, but rather due to expectations of longer lead times at some suppliers, sources said.
“Some suppliers [are] undertaking longer-than-usual holiday stoppages because of the poor market conditions,” a German buyer said.
Transactions for HRC with lead times in January-February were reported at €550-570 ($578-599) per tonne ex-works in Northern Europe, depending on the supplier and lead times.
This was in contracts with official offers voiced at €580-600 per tonne ex-works.
“The market sentiment is downbeat, especially in Germany, where many companies are shrinking down ops and announcing staff lay-offs,” a second source in Germany said. “On top of that, there was the vote of no confidence in ‘Bundestag’ on December 16, leaving Germany without [an] effective government. A new elected government can’t be in power until around April 2025, at best. Such long waiting time is poison for any investor who needs security for his planned projects,” they added.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €561.13 per tonne on Tuesday, down by €0.75 per tonne from €561.88 per tonne on Monday December 16.
The index was down by €0.30 per tonne week on week and by €1.37 per tonne month on month.
Several sources reported some closures of half-year contracts for the first half of 2025 with a discount of €80 per tonne versus the second half of 2024, sources told Fastmarkets.
Some contracts were heard done at €650-670 per tonne compared with €730-750 per tonne from the second half of 2024, sources told Fastmarkets.
“Mills can be satisfied with such results. Initially, automakers were asking for more substantial discount of €100-150 per tonne,” a second buyer said.
For the full-year contracts, one source reported a discount of €80-90 per tonne versus full year 20024 contracts.
“We achieved €80-90 per tonne discounts on full-year 2025 contracts,” an original equipment manufacturer in automotive industry told Fastmarkets.
In Southern Europe, Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Italy at €560.00 per tonne on Tuesday, down by €1.25 per tonne from €561.25 per tonne a day earlier.
However, the Italian index was up by €1.00 per tonne week on week and by €4.00 per tonne month on month.
Italian mills have also closed January order books, with deals reported at €550-560 per tonne ex-works, depending on the supplier.
Local integrated mills were offering HRC for delivery in the first quarter of 2025 at €580-620 per tonne delivered, which would net back to €570-610 per tonne ex-works.
The Italian market was also slowing down for the holidays, with most participants taking leave from December 23 and returning after January 6.
The market for import coil was quiet in the recent months due to numerous trade restrictions in place, long lead times and uncompetitive prices.
Offers of imported coil were limited on Tuesday
Turkey was heard offering HRC to Italy at $590 per tonne CFR, including the anti-dumping duty.
South Korea-origin coil was on offer to Italy at €580 per tonne CFR, industry sources told Fastmarkets.
Earlier this week, a transaction for Ukrainian HRC to Italy was heard at €530 per tonne CFR.
Buyers estimated workable levels for imports at no higher than €520-540 per tonne CFR, sources told Fastmarkets.
European Commission bows to industry pressure, starts steel safeguards review; tougher restrictions likely
A request to initiate the review was submitted by 13 EU member states on November 29.
“The request contains evidence of a change of circumstances since the last review of the measures. In particular, the request contains information regarding the contraction in European Union demand for steel, resulting in widening gaps with the current level of duty-free quota volumes,” the notice said. “Moreover, [the surge in] China’s steel exports to major regions has pushed exports from other markets to the EU. According to the request, this calls for a reassessment of the allocation and management of the tariff-rate quotas.”
The review process will be accelerated, the Commission said, and is expected conclude by March 31, 2025, with any adjustments to the current measures expected to come into force the following month.
Industry concerns include the allocation and management of tariff-rate quotas; the crowding out of traditional trade flows; getting an updated list of developing WTO member countries excluded from the scope of the measures based on their most recent level of imports for 2024; the level of annual liberalisation of the quotas; and any other changing circumstances that could require an adjustment to the level or allocation of tariff-rate quotas.
“In any case, with all the trade measures in place we can expect increased reliance on domestically produced steel in the EU,” a distributor in the Benelux region told Fastmarkets.
Wider market
European steel safeguard measures have been in place since July 2018.
The latest review of the safeguard measures only came into force on July 1, 2024, but has already had a substantial effect on the market due to a proposed 15% cap per country over the tariff rate quota (TRQ) volume initially available in each quarter for HRC and wire rod in particular.
In addition, in August 2024 the Commission launched an anti-dumping probe into HRC imports from Egypt, India, Japan and Vietnam.
Since then, market participants have noticed that Asian suppliers have become less active and said that “importing steel has become like a gambling” now.
“These trade barriers create additional uncertainty which is not encouraging demand [for imported steel], so we can expect more demand for EU-made steel and it’s safer [to book European steel],” a trading source said.
“It’s an issue for import steel buyers in Europe that they don’t know the potential extra costs they might be facing by the time [any steel arrives],” a second trader said.
In January-September 2024, carbon steel imports to the EU amounted to 20 million tonnes. For the whole of 2023, steel imports were 24.8 million tonnes.
Sources said that imports account for up to 30% of EU steel consumption.
Global steel overcapacity, particularly in regions such as China and the US – which benefit from more favorable production conditions- was undermining the viability of the EU steel sector, producer source told Fastmarkets.
“China is massively exporting steel globally at dumped prices, which is, in turn, severely depressing prices worldwide. On top of this, these excessive exports result in trade flow diversions to the EU market,” a producer in northern Europe said.
World crude steelmaking capacity in 2023 was estimated at 2.439 billion tonnes per year, exceeding production by 552 million tpy, according to the Organisation for Economic Co-operation and Development (OECD).
In 2023, steel output among the EU’s 27 member states fell to 126.30 million tonnes, down from 136.30 million tonnes in 2022 and down from 152.60 million tonnes in 2021, according to data from the World Steel Association.
Assofermet: downstream slowdown, pricing pressure Italian service centres
Reduced sales volumes and high costs continue to plague the Italian service centre and distribution sector, which is wedged between steelmakers and end users, Italian trade association Assofermet says in a market note seen by Kallanish.
In response to the upstream price increases for coils, service centres are now being compelled to raise prices of coil derivatives and pass the hiked costs on downstream. Firms are aiming to enhance financial positions and secure margins for the conclusion of the year.
The prevailing sentiment for December is one of a wait-and-see attitude. “November saw the consolidation of rising [hot rolled coil] quotes from EU steel mills despite much weakened demand from the downstream market, which still does not seem to be waking up. It is precisely this decoupling between the upstream production sector and downstream consumption which both confuses and worries all operators,” the note states.
Steelmakers are under pressure to enhance their financial performance, and the production cuts announced for 2025 are a response to persistently pressured margins. Assofermet is observing a stagnation in demand from various end users, which is preventing any new growth in prices and volumes.
EU producers, however, are rigidly insisting on increasing prices, driven by a reduction in available import quotas alongside anti-dumping duties, which make purchasing from the import market uncompetitive.
In November, distributors experienced a notable decline in volumes, accompanied by reductions in margins and turnover, primarily driven by persistent price weakness.
Assofermet recently launched a new calculation platform enabling coil buyers to assess potential anti-dumping and anti-subsidy duties as part of European Commission investigations. The initiative aims to support members’ understanding of the EU regulations regarding anti-dumping investigations. The calculator assists in evaluating the potential timing and imposition of duties.
Natalia Capra France
Longs market enters holidays, trade challenges loom: Irepas
The global long steel market has entered the holiday season, with significant business activity expected to resume only after 13 January.
Chinese export pressure on global markets, Europe’s steel sector challenges due to high energy costs and weak demand, which has already led to shutdowns, and potential policy shifts in the US are further adding to uncertainty, Kallanish notes from the International Rebar Exporters and Producers Association (Irepas) December outlook.
“Under these circumstances, the situation in the global longs market, where competition remains very tough and more local than global, may be described as unstable and complicated with a difficult, unpredictable outlook,” Irepas forecasts.
Irepas suggests Chinese steel exporters may not have full export order books for the first quarter of 2025 as overseas demand and prices continue to decline. Therefore, “steel prices in the international markets, except in the US, will suffer going forward,” it adds.
Chinese stimulus measures are expected to have a limited impact on limiting steel export volumes in the short term. Domestic prices in China remain low, while production cuts are unlikely, as “Chinese Premier Xi Jinping has pledged that China will meet its ambitious GDP growth target of 5% this year and remain the engine of global economic expansion, and so no production cuts would be anticipated,” Irepas explains.
EU producers are squeezed between weak demand and high costs, limiting their ability to reduce prices while competing with imports. Energy prices in Europe have surged to 2022 levels, prompting mills to temporarily halt liquid steel output or reduce production hours to control supply. “Usually, this would push prices up, but in the current low season, we have to wait and see what happens,” Irepas notes, adding: “It is a good sign that prices have not slid down any further [in the EU].”
In the US, a “not-so-pleasant winter” is expected. “US domestic mills have been keeping prices low and are still offering discounts on already low prices,” Irepas says. “On the other hand, US domestic scrap pricing for December is expected to be down, for the first time in two decades.”
Although interest rates have slightly eased, they remain high for investments. The steel trade may soon become more difficult due to looming additional duties proposed by the new US administration. These duties could trigger retaliatory measures from other countries, further complicating global long steel trade.
Elina Virchenko UAE
European HRC prices steady amid sluggish trading
There was a slight pick-up in trading, but it was related to the expected longer lead times from some suppliers, Fastmarkets understands.
According to industry sources, some steelmakers were planning to extend their winter holiday closures, resulting in longer lead times for HRC.
Fastmarkets calculated its daily steel hot-rolled coil index domestic, exw Northern Europe at €561.88 ($590) per tonne on Monday, down by €0.62 per tonne from €562.50 per tonne on Friday December 13.
The index was down by €1.60 per tonne week on week and by €0.62 per tonne month on month.
Mills in Northern Europe continued aiming at €600 per tonne ex-works for HRC with delivery in the first quarter of 2025, industry sources told Fastmarkets.
However, material was also offered at €570-590 per tonne ex-works, Fastmarkets understands.
Some deals for small volumes were heard at €560 per tonne ex-works.
According to industry sources, the workable market level for HRC in Northern Europe was at €550-560 per tonne ex-works.
In Southern Europe, meanwhile, Fastmarkets calculated its daily steel hot-rolled coil index, domestic exw Italy at €561.25 per tonne on Monday, down by €0.25 per tonne from €561.50 per tonne on Friday.
The Italian index was up by €0.83 per tonne week on week and by €5.25 per tonne month on month.
According to industry sources, local suppliers were heard offering HRC with delivery in the first quarter of 2025 at €580-620 per tonne delivered, which would net back to €570-610 per tonne ex-works.
“The actual levels [in deals] are still far below [the targeted price by mills of] €600 per tonne ex-works,” a buyer source based in Italy told Fastmarkets.
According to the source, suppliers in Italy would probably try another price increase after the Christmas holidays, targeting levels higher than €600 per tonne ex-works.
Meanwhile, a medium tonnage deal of HRC from Italy to Germany was heard at €580-590 per tonne delivered, with the freight cost between the two countries estimated at around €50 per tonne.
Buyers’ estimations for the workable market level were at €550-570 per tonne ex-works.
In terms of imports, Turkey was heard offering HRC to Italy at $590 per tonne CFR, including the anti-dumping duty.
Asia-origin coil was on offer to Italy at €590 per tonne CFR, industry sources told Fastmarkets.
Some volumes of HRC from Ukraine were booked in Italy at €530 per tonne CFR, Fastmarkets understands.
Tata Steel UK to supply JCB with green steel
The green steel would be produced at Tata’s site at Port Talbot in South Wales which is set to undergo a £1.25 billion ($1.58 billion) overhaul.
The steelmaker added that this was the first supply agreement it had made since the announcement of the transformation of the Port Talbot site.
The project includes building a new 3-million-tonne per year electric arc furnace (EAF), which offers a low-carbon alternative to the traditional blast furnace method.
The EAF is expected to be functional at the end of 2027, thus, replacing the two blast furnaces, which were operational a few months ago.
BF5 was closed in July this year, and BF4 was closed in September.
The Port Talbot site produced mainly hot-rolled coil and cold-rolled coil.
The company managed to receive a support package of £500 million from the UK government to fuel its plan to develop a lower-emissions electric-arc furnace-based steelmaking plant.
Tata Steel UK added that JBC is focused on carbon reduction in its manufacturing and will integrate the steel into its machinery range.
“We are fully supportive of Tata Steel UK’s investment proposals and are pleased to be one of the first customers to endorse those plans by making this agreement to secure British-made green steel as soon as it is available,” Wayne Asprey, JBC’s group purchasing director, said.
Market overview
Demand for green flat steel in Europe is still limited and highly regionalized, but premiums for such material have strengthened slightly on a weekly basis because most suppliers refuse to undercut prices much even in the face of low demand, Fastmarkets reported.
According to industry sources, most demand for green steel was coming from the Nordic states.
Fastmarkets’ methodology defines European green steel as “steel produced with Scope 1, 2 & 3 emissions at a maximum of 0.8 tonne of CO2 per tonne of steel.”
Leading European suppliers kept the premiums for such steel at €200-350 per tonne, sources told Fastmarkets.
During the assessment week to December 12, buyer sources estimated achievable premiums for green steel with such level of emissions at €50-120 per tonne, although the lower end of that range was not considered workable by mill sources.
Even slightly higher bids, reaching at €70 per tonne, have been rejected.
As a result, Fastmarkets’ weekly assessment of the green steel domestic, flat-rolled, differential to HRC index, exw Northern Europe, was €100-200 per tonne on December12, narrowing upward by €20 per tonne from €80-200 per tonne seven days earlier.
But the green steel premium in Northern Europe averaged €145 per tonne in November, compared to €200 per tonne in January this year.
According to industry sources, the lack of willingness to pay premiums for steel with reduced carbon emissions content was partially explained by the unfavorable economic situation in Europe.