Marcegaglia Stainless Sheffield is expanding its product offering as debate continues over the impact of steel quotas on downstream industries, Kallanish notes.
President of Marcegaglia Stainless Sheffield, Liam Bates says in a published online commentary that the company’s track record across Europe and the US shows its ability to supply the sector. He argues that the impact of UK stainless steel long product quotas is not as severe as some predict, and that a practical solution exists. The UK market for stainless long products was previously estimated at 33,000 tonnes, but following the latest government review, two product codes not produced domestically were removed, reducing the effective market size to 30,000t.
The government also raised tariff-free quotas to 20,000t/year, meaning that for every tonne of domestic production, approximately two tonnes can still be imported without tariffs.
“Most stakeholders agree that standard products make up most of the demand and can be produced locally. The challenge is that a significant proportion of UK stainless steel distribution is owned, wholly or partly, by European bar mills or their parent groups. For many years, these businesses have supplied the UK market from their European production base and understandably want to protect this position. However, trade policy is now changing buying patterns across the UK, EU and US alike,” Bates says.
“As a result, sourcing strategies will need to [change] and the UK cannot be an exception,” Bates adds. He argues that even in a worst-case scenario, the average tariff impact across the market equates to around 17% if every tonne is imported, and that this implies no change in buying behaviour.
The most practical solution, he argues, is for importers to source a greater share of standard material from British producers while continuing to import specialist grades that are less readily available domestically. A relatively small shift in volume towards domestic standards would create capacity for specialty products to continue flowing freely, he concludes.
Marcegaglia Stainless is expanding capacity in Northern Europe and broadening its long products range in its Fagersta facility in Sweden while also investing in its Sheffield facility in the UK. The Sheffield melt shop will be idled between 3 July and 15 August for the installation of a new furnace to produce billets and slabs. A portion of billets produced in Sheffield will be sent to Sweden for re-rolling for the European market, while billets and slabs produced in the UK will remain in the country (see Kallanish passim).
