The UK’s International Steel Trade Association (ISTA) has expressed concern over the incoming tariff rate quotas (TRQ) for imports of steel into the nation, Kallanish learns from a statement.
ISTA says that while it is appreciative of the actions taken in relation to the transitional agreement following feedback, it is “very disappointed” with the size of TRQs and country splits.
“There has been very limited movement against ISTA requests with most at UK Steel’s behest,” the association says.
It notes an increase in Category 1, HRC, and a small reduction in the galvanized volumes from the European Union, which has not been fully utilised. It highlights a small increase in Category 4 for South Korea, and some changes for long products in Categories 12, 17 and 26, which have risen while Category 28 has declined.
ISTA says it remains concerned that whilst some HS codes have been removed, others have been added along with a number of new categories.
“Whilst we support UK steel manufacture, the UK mills are ill prepared to service the market both in terms of what the end users need and when, and financially in terms of the provision of usual credit payment terms,” the statement continues.
As such, steel shortages and a flight to products made from steel manufactured overseas could occur.
“The measures still include products which are not manufactured in the UK partly due to all the encompassing HS codes,” ISTA adds.
The association will continue to engage with the Department for Business and Trade and ministers on these issues and push for a review of the measures at the latest, in six months.
“This is not a good day for the industry that they passionately believe in,” ISTA concludes.
One trader tells Kallanish that the new quotas are “a lot more workable” in some categories, while others remain too restricted. However, he points to risks of oversupply in the near-term.
“People have stocked up based on the provisional quotas,” the trader says. “It’s made everyone panic so much and buy so heavily, resulting in high stocks. Now the quotas have been relaxed, there’s going to be more availability in addition to the transitional agreement.”
Another source says the quotas are “a shock to the market, people will have to reshape their business models”.
Another says it is “too early to say” what the impact of the quotas will be on supply and prices.
In an online post, USP Steel says that UK steel supply is to tighten significantly from the reductions in quotas. USP expects steel prices to increase by 30-35% during the second half of the year, and by 50% in worst cases, depending on the origin.
“We can’t see the EU numbers so we can’t judge if we’ve had a raw deal,” another source says.
