Imports will have a role to play in the UK steel market, even with the reduced tariff-rate quotas, 7 Steel UK chief executive Carles Rovira tells Kallanish.
“Imports have always been there … and they have a role to fill. I don’t think the quotas are shutting down the imports. I think the quotas are designed to strengthen the domestic industry,” he says ahead of the 1 July implementation.
In a separate statement, he describes the quotas as “a step in the right direction” but adds that “delivery now matters more than design”. He warns the government risks “holding back both producers and customers” if the growth of the UK steel and manufacturing sector is not supported.
“I think to have a strong domestic supplier is good for the whole supply chain, and obviously have imports also, which need to play their role as well,” Rovira notes, adding that there is always a higher risk when buyers opt for non-domestic material.
Sourcing domestically will not work for every customer, as some may be more fixed on prices as their priority, he acknowledges, but it will for some who see value in buying British. “Each customer is different because they have different needs,” he explains.
“There are very different situations in the downstream market. There are customers who are importing 100% of the product, of the raw material, [and] there are customers that are importing 40% of their product. I don’t see how for customers that are importing 30% or 40% of their product, that’s going to mean a big change in the business. They’re going to import a bit less, but they’re still relying on the domestic supply,” he adds.
“Imports will change over time, the country of origin, the product, and there will be disruptions. The domestic supplier should be there to support the supply chain and the customers throughout the years, because we have been here for 20 years, and we expect to be here 20 more,” he continues.
The steelmaker is looking to reallocate some of its export volumes away from Europe and into the domestic market, while also increasing its stock levels to be able to meet any increase in demand.
Rovira adds that the final quota numbers will signal if there is any further investment opportunity. The firm is reviewing its rod and bar mill portfolio, which could see some small size increases for merchant bar and sections. Its owner, Sev.en GI, recently announced £100 million ($132m) in investments for the steelmaker.
