UK industry groups flag government policy risk
Industry association UK Steel has joined other energy-intensive industry trade associations in signing an open letter to the government detailing the risks of certain policy impacts on their respective sectors, Kallanish learns.
The letter to Sarah Jones, Minister of State for the Department for Business and Trade, was spearheaded by Arjan Geveke, director of the Energy Intensive Users Group (EIUG). As well as UK Steel, other signatories includes those from the glass and ceramics sectors, chemicals and refineries, paper and mineral sectors, as well as the GMB Union.
It says while they support the government’s ambitions to boost economic growth and meet the Net Zero target, their ability to invest in decarbonisation technologies is held back by relatively high electricity costs, policy uncertainty and risk of carbon leakage. This has often made investment in the UK uncompetitive.
It notes the UK currently has higher industrial energy costs than in Europe, the US and Asia. This is something UK Steel has flagged repeatedly, calling on the government to increase the rate of compensation for network charges from 60% to 90% to bring UK network charges closer to those in key European countries.
The letter also notes that security of energy supply is critical but the rise of “intermittent technologies”, such as renewables, generating electricity and changes in geo-political circumstances, has increased risk.
Meanwhile, it also says the UK’s Carbon Border Adjustment Mechanism (CBAM) needs significant improvement to make it effective and without loopholes. Its 2027 implementation risks trade barriers and trade diversion with the EU when the bloc’s CBAM starts in 2026.
“The 12-month gap could see detrimental impacts, as higher-carbon products that would have been imported to the EU risk being diverted to the UK instead,” it says.
If the government will not bring CBAM forward to 2026, it asks it to prepare mitigation measures, particularly around trade remedies. It also wants to ensure carbon leakage policy addresses both import and export risks.
The NESO Clean Power 2030 report includes a central estimate for gas price at 101p/therm and an ETS price assumption of £142/tonne, as well as an additional £25/tonne tariff for fossil-generated power to disincentivise exports of unabated power.
“Energy intensive industries will not be able to bear these carbon costs as long as there is no effective UK CBAM without loopholes and there are no commercial decarbonisation technologies available,” the letter states.
It also expresses concern over NESO’s proposed approach to fast-tracking grid connection for Clean Power 2030 which prioritises connecting low carbon power over industrial decarbonisation projects. It calls for industrial decarbonisation to be given the same priority as electricity decarbonisation in terms of network connections.
Carrie Bone UK
Marcegaglia UK expands stainless steel tube production
Marcegaglia UK has announced an expansion of its manufacturing capabilities at its Oldbury site and now produces electro-welded stainless steel tubes.
The addition complements its existing production of carbon steel tubes, allowing it to provide a broad range of high-quality steel products for various applications, Kallanish learns from the company.
The Oldbury facility spans 69,000 square metres, with 46,184 square metres of covered space. It is equipped with four production lines for carbon steel tubes, with a total capacity of 70,000 tonnes, alongside three production lines for stainless steel tubes, enhancing the capacity by an additional 30,000t.
The production of stainless steel welded tubes at Marcegaglia UK focuses primarily on steel grade 304, adhering to the EN10296-2 standards for round tubes and ASTM A544 standards for square and rectangular tubes.
The company says the expansion marks a significant step in its UK’s growth, reflecting its dedication to meeting the diverse needs of its customers across the steel industry whilst its production lines are equipped to provide a variety of specific tube finishes.
Marcegaglia UK has recently become a member of the British Stainless Steel Association (BSSA).
Carrie Bone UK
UK revokes safeguard on CR-sheets amid production halt
The UK is to revoke its safeguard measures on cold-rolled sheets as the country’s sole producer is ceasing production of these products for domestic sale, Kallanish notes from Trade Remedies Authority’s (TRA) notice published on 22 January 2025.
The decision, effective the day after publication, applies to category 2 steel products, including non-alloy and other alloy cold-rolled sheets under the following commodity codes: 72091500, 72091690, 72091790, 72091891, 72092500, 72092690, 72092790, 72092890, 72099020, 72099080, 72112320, 72112330, 72112380, 72112900, 72119020, 72119080, 72255020, 72255080, 72262000, and 72269200.
The discontinuation review occurred due to a change in circumstances since an extension of the measure on 1 July 2024. Evidence indicated that UK steel producers would no longer face serious harm if the measures were lifted. This follows an application by UK producer Tata Steel in November 2024.
Meanwhile, India has significantly utilised its quota, with 47% or 5,400 tonnes remaining. South Korea has 72% or 7,000t of its allocation available, while the EU and Others have used little of their allowances, leaving 93% and 92% available, respectively, as of 20 January.
| Origin | Quota 01.01.25 – 31.03.2025 | Imported | Remaining | Remaining, % |
| EU | 79.3 | 5.7 | 73.6 | 93 |
| India | 11.7 | 6.2 | 5.4 | 47 |
| South Korea | 9.8 | 2.7 | 7.0 | 72 |
| Others | 24.7 | 2.0 | 22.8 | 92 |
Source: UK Government.
Elina Virchenko UAE
British Steel opens new steel profile service centre
British Steel has announced the opening of a £26 million ($31.6m) service centre at its special profiles business in Skinningrove, UK, Kallanish learns.
The site specialises in manufacturing steel profiles for the earth moving, forklift, construction, shipbuilding and mining markets. The investment will establish it as one of the leading suppliers to the forklift truck mast industry.
Its milling capability will primarily service the demanding high-reach forklift truck market. The company adds that the investment will enable the company to explore growth opportunities across the globe for its standard and bespoke forklift mast profiles, with the new warehousing and processing facility forecast to significantly increase throughput within the next two years.
“This is the largest single investment in our special profiles business for more than 30 years, demonstrating our owner’s commitment to strengthening British Steel’s position at the heart of UK manufacturing,” states Richard Napier, British Steel’s sales director for special profiles.
“The new facility also firmly establishes us as one of the world’s leading manufacturers and processors of value-added profiles for the forklift industry. Our extended range of products are designed and manufactured to exact customer requirements, with the new milling capability offering profiles with tolerances of just 0.1mm – precision few global competitors can match,” he adds.
The facility includes four new CNC lathes for turning mill rolls, three automated bandsaws for cutting stock to exact lengths, a laser measurement system for process control of every bar rolled, and a warehousing system for storing and processing material from the rolling mill. It also incorporates a 14-metre bed, milling machines.
Steel for the rolling mill at Skinningrove, including the new service centre, is manufactured in Scunthorpe.
Late last year the company also opened a £10m rail stocking facility in Scunthorpe.
Carrie Bone UK
UK HRC price increases; 2025 outlooks contingent on demand
‘We are at the bottom of the market’: service center source
UK hot-rolled coil prices rose on Nov. 28, as market participants cited ongoing negativity impacting the sector and limited buying interest.
Although spot buying interest remained minimal on the week amid stable offers, sources referred to higher tradables and shared relatively bullish outlooks for 2025, with many of them hopeful for price increases.
“It’s not all negative, prices have come up from the EU and from imports, even if demand hasn’t increased,” one seller said. “A lot of service centers have held back booking material and, on their sales side, they aren’t putting pressure on customers, so they are barely covering costs before thinking of replacement costs.”
Market participants also referred to the ongoing negativity surrounding EU mills and the potential for further cutbacks in both capacity and workforce, following announcements from steel makers ArcelorMittal and Thyssenkrupp.
“Nobody is making a profit at any level of the market, there is something fundamentally wrong, but I think we are at the bottom and if we see cutbacks then there will be conditions for EU mills to raise the price,” a distributor source said.
A service center source also suggested HRC prices had reached the floor. “Traders are struggling to get shippable quantities into the UK, and EU mills aren’t making money, so we’re seeing closures and it’s inevitable we will get more closures and cuts quite soon,” he said.
“We are at the bottom of the market, so we need more cutbacks, and it could lead to price hikes; we are already hearing of higher rates into March from some EU mills, and if imports are out of the question for Q1, EU mills will dominate the market, which could be bullish but only if demand improves,” the same source said.
Platts assessed UK HRC at GBP530/mt basis DDP West Midlands, up GBP5 on the week.
UK government confirms 2027 CBAM introduction
The UK government has confirmed that its Carbon Border Adjustment Mechanism (CBAM) will start from January 2027, it says in a published consultation document dated 30 October.
It says the mechanism will place a carbon price on some of the most emissions-intensive industrial goods imported to the UK from the aluminium, cement, fertiliser, hydrogen, iron and steel sectors. Within these sectors, the CBAM will only apply to specific imported “CBAM goods”, determined by the product level scope of the CBAM and identified by commodity code.
The document confirmed, as previously announced, the mechanism will be applied to “direct”, “indirect” and select “precursor” product emissions embodied in imported CBAM goods, Kallanish notes.
The consultation, which launched back in March, proposed that imported scrap, identified via commodity codes, within relevant sectors will not be within the scope of the UK CBAM.
The government adds that the January 2027 start date would balance the need to give businesses time to prepare, while also taking action on carbon leakage amid its ambition to decarbonise the country.
Companies who responded to the consultation include British Steel, Celsa Steel UK, Electrosteel UK Ltd, Hyundai Steel, Jaguar Land Rover, Mughal Steel, Salzgitter Mannesmann UK, Stemcor, Tata Steel Europe and UK steel.
The UK’s current main measure to mitigate carbon leakage risk is the system of free allocation under the UK ETS. Reforms to the UK ETS, as set out by the UK ETS Authority in July 2023, will reduce the number of permits available for purchase from government by 45% between 2023 and 2027, and the number of free allowances will also decrease.
The document also notes that in September 2024 the UK ETS Authority consulted on moving the start of the second free allocation period from 2026 to 2027 and extending the current allocation period to include 2026.
A move to 2027 would enable the government to align the implementation of the Free Allocation Review with the introduction of the UK CBAM, ensuring a holistic policy approach to carbon leakage, authorities observe.
The UK ETS Authority will make a final decision and respond to the consultation in due course.
Carrie Bone UK
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.”
