UK HRC market remains unchanged amid low demand, excess supply
Domestic prices for hot-rolled coil in the UK were stable in the week ending July 11, following a prolonged period of low demand and excess supply.
“The market is in a standoff mode basically,” a UK-based trader source said. “Mills don’t want to go lower on prices, and customers don’t want to pay any higher.”
Market sources said that most imports have become unattractive due to the quotas, and some mills, especially in Europe, are using this opportunity to go aggressive.
“Imports from India fall under quotas. Lead times for imports from Vietnam are unattractive,” the source said. “Mills are using this to go aggressive on prices because they’re not making any money at the current levels.”
Lead times on some imports from countries like Vietnam remain particularly long, proving a costly choice for consumers despite the initial discount they may offer. Imports from Turkey remain the only suitable alternative for market participants, sources said.
Platts assessed UK HRC flat on the week at GBP595/mt basis DDP West Midlands.
Devbrat Saha
UK HRC market sentiment bearish on low demand
Domestic prices for hot-rolled coil in the UK fell in the week ended May 16 as trading activity remained low and distributors started to offload ex-stock material at competitive prices.
Atlantic Steel Processing, a flat steel service center and stockholder, went into administration on May 14, according to official government data. Market sources said that this will result in significant tonnages going around and prices are expected to be lower in the coming weeks.
“Atlantic steel went into administration, so the cargo has to go somewhere,” a trader source said. “Spot prices are expected to be lower because of this for the next 2-3 weeks.”
Atlantic Steel typically has up to 10,000 mt of flat steel in the warehouse, and further 10,000 mt in ports, according to the company’s website.
Steelmakers have been struggling to fill order books as buyers were holding back from bookings. Sources also said that no significant improvement in demand is expected until next year.
“The market is still very quiet,” a service center source said. “EU mills are hungry for orders.”
Additionally, the bearish mood in the market was supported by competitive stocks of local distributors offering European hot-rolled coil at GBP580-600/mt ex-stock West Midlands.
For new EU-origin material, offers and tradable values were reported at GBP610-620/mt DDP West Midlands.
For material originating from Vietnam, offers were reported at GBP590-600/mt DDP West Midlands, while tradable values were reported at GBP580-585/mt DDP West Midlands.
For material originating from Turkey, offers and tradable values were reported at GBP590-610/mt DDP West Midlands.
Platts assessed UK HRC down GBP5/mt on the day at GBP605/mt basis DDP West Midlands May 16.
For the “other countries” UK HRC category, mainly including material from Asia, 89% of the total quota — which is 22,589 mt — has already been used, according to official UK government data.
Platts is part of S&P Global Commodity Insights.
UK could follow EU safeguarding measures on China-made EVs
The UK’s Trade Remedies Authority (TRA), a post-Brexit trade watchdog, says it would be ready to implement an investigation on Chinese electric vehicle imports if the government required it to do so.
Oliver Griffiths, ceo of TRA, told the Guardian neither the government nor carmakers have requested such a move yet, though they are closely watching market developments. “We’ve been in close and regular contact with the industry on this one, and lots of people are looking at the import numbers… All eyes will be on Brussels later on this year when they could potentially bring out an interim measure on this,” he says.
Last year, the European Commission announced it would be probing China-made electric vehicles entering its borders due to heavy subsidies and competition distortion. Then, EC President Ursula von der Leyen said the investigation seeks to defend the EU against “unfair practices,” de-risking, not decoupling from China. The probe reportedly started in October on BYD, Geely and SAIC, but is also set to cover European carmakers with production capacity in China.
The EU remains the UK’s biggest automotive trade partner and vice-versa. According to the latest trade report from the UK automotive association SMMT, China was the second largest supplier of cars to the UK in 2022, with a 9.2% share of its total imports (including both EV and ICE cars). Most of the car imports (71.3%) came from the EU.
According to Sam Lowe, partner and trade expert at Flint Global, if and when the EU introduces new countervailing tariffs on China-originating EVs, “the UK will come under a lot more pressure to do the same.”
“Where the EU moves, the UK usually follows,” he adds in a note seen by Kallanish. “While the UK government and industry are currently publicly reluctant to replicate the EU measures, this will probably change once China-originating cars originally destined for the EU turn up in observable quantities on British driveways.”
The EU is among one of the most open markets for Chinese firms trying to get a footprint abroad, Lowe notes. That’s because, with a 10% tariff, it’s relatively more attractive to Chinese car exporters than the US and Turkey, where import tariffs stand at 27.5% and 50%, respectively.
UK Trade Remedies Authority expects steel HRC safeguard to be suspended
The UK’s safeguard on hot-rolled coil (HRC) may need to be removed, the UK Trade Remedies Authority (TRA) said today, announcing both suspension and tariff-rate quota reviews on the product.
The TRA has initiated both reviews following applications from Tata Steel UK and Kromat Trading, each in response to Tata’s plan to close its blast furnaces and import HRC and slab, it said today.
“Based on the applications and from other evidence available on the current state of the market, it is the TRA’s preliminary view that the measure should be suspended,” the TRA said. Tata’s plan would mean the current level of duty-free quota for HRC would be insufficient for UK needs, it said, suggesting imports are already facing duties because of the increase on volumes contributed to by Tata’s importation of HRC.
The TRA provisionally believes the safeguard on HRC should be suspended for nine months.
Its review considers the plan Tata submitted to trade unions on 19 January, and if these plans change, it will take this into account during its review. Once the TRA has completed its review, it will make recommendations to the Secretary of State for Business and Trade, who makes the final decision.
If any suspension recommendation is made and accepted by the government, the TRA will use the period to rework the quota system, enabling sufficient volumes for the market going forward. The quota could be global and importers potentially would be apportioned their own volumes, but it is not yet clear how this would be worked out, or if the plan could be amended in the course of the review.
“These reviews are designed to prepare the current steel trade regime for future changes in production at Port Talbot,” TRA chief executive Oliver Griffiths said. “We want to avoid a situation where new imports needed to backfill reduced domestic production pay tariffs of 25pc, loading additional costs on to the UK economy.”
ISTA to meet UK govt on Tata Steel import concerns
ISTA had called for an immediate solution to make it possible for UK buyers to import Indian material. Sources close to the matter told S&P Global Commodity Insights Aug. 3 that the UK government agreed to meet the trade body in September to discuss the matter.
In the July 27 letter seen by S&P Global that was sent to members late-Aug. 3, ISTA claims that the repeated steel orders by Tata Steel UK could be seen as “an unfairly attempt to manipulate the free market.”
“Like all UK steel producers, Tata benefits from the protection of the Safeguard Measures quota system, but it cannot be considered as fair trading practice to then take up that quota thus preventing importers from supplying their own customers,” the letter said.
“Steel already booked and currently on the water to the UK, destined for independent service centres and manufacturing, will not be able to be customs cleared and utilised – a fact Tata Steel know only too well,” ISTA said in the letter, warning that the lack of import opportunities would have a “devastating and immediate effect on steel manufacturing.”
ISTA suggested several options to resolve the matter: to either create a new import category code for Tata Steel’s own domestic use or changing the quota to be utilized for its intended imports and end-user customers. Another possibility would be to increase the quota volume for the other country category, under which Indian material falls.
Tata Steel to receive new order in Sep
Tata Steel has a 22,000 mt order of Indian HRC arriving in September for clearance under the quota period starting Oct. 1. The quota is expected to exceed immediately, sources said. The company is also said to have received a previous order of Indian material in June to support production of its Port Talbot works while it faced production problems.
Although it is understood that Tata has not received material in the current quota period July 1 to Sept. 30, the quota nevertheless is likely to be exhausted soon. There are 1,105 mt left under the other country quota as of Aug. 3, which means it is considered “critical” where a 25% duty deposit has to be paid. The opening balance was 22,837 mt.
Tata Steel UK declined to make an immediate comment on the matter when contacted Aug. 3 after usual office hours.
In an earlier statement July 27 to S&P Global, a spokesperson had said: “Tata Steel, like most other steelmakers, sometimes complements its own production with supplies from other sources to balance its utilisation of downstream businesses.”
The Platts weekly assessment for UK HRC was at GBP615/mt DDP West Midlands Aug 3, stable week on week, according to data from S&P Global.
Author Laura Varriale
UK suspends Iran, Russia HR flats anti-dumping duties
The UK has partially or completely suspended anti-dumping duties on flat steel from Iran and Russia in the case the product concerned is subjected to safeguard duty, once the applicable import quota has been surpassed, says the UK Trade Remedies Authority.
The trade remedies notice published on 2 August is effective immediately, Kallanish notes.
The anti-dumping duty on the steel goods will be charged only until the relevant import quota is exceeded. After that point, only the portion of the anti-dumping duty exceeding the safeguard duty along with the safeguard duty itself will be charged.
The hot-rolled flat iron, non-alloy, or other alloy steel goods subject to both anti-dumping and safeguard duty are usually imported into the UK under the following UK global tariff (UKGT) commodity codes: 72 08 10 00 00, 72 08 25 00 00, 72 08 26 00 00, 72 08 27 00 00, 72 08 36 00 00, 72 08 37 00 10, 72 08 37 00 90, 72 08 38 00 10, 72 08 38 00 90, 72 08 39 00 10, 72 08 39 00 90, 72 08 40 00 10, 72 08 40 00 90, 72 08 52 10 00, 72 08 52 99 00, 72 08 53 10 00, 72 08 53 90 00, 72 08 54 00 00, 72 11 13 00 11, 72 11 13 00 19, 72 11 14 00 10, 72 11 14 00 91, 72 11 14 00 95, 72 11 19 00 10, 72 11 19 00 91, 72 11 19 00 95, 72 25 19 10 90, 72 25 30 90 00, 72 25 40 90 00, 72 26 19 10 91, 72 26 19 10 95, 72 26 91 91 11, 72 26 91 91 19 and 72 26 91 99 00.
The new specific anti-dumping duty rates payable on hot-rolled steel originating in Iran or Russia vary upon exporter and origin.
In case of Iranian exporters, Mobarakeh Steel Company and others, there will be no anti-dumping duty after the suspension.
For Russian exporters, namely for NLMK and Severstal, there will be no anti-dumping duty after suspension, while for Magnitogorsk Iron Steel Works (MMK) and other Russian producers there will be an anti-dumping duty of £19.57/tonne ($24.90), or 8%. Before the suspension, Iranian exporters were levied with £48.12/t (17.9%).
For Russian exporters, the anti-dumping duty before suspension is £44.61 (15%) for NLMK, £14.73 (5.3%) for Severstal and £80.76 (33%) for MMK and others.
The public notice does not cover HR flat steel originating from Brazil or Ukraine, as it is excluded from the safeguard duty.
Elina Virchenko UAE
