The UK government, based on a recommendation from the secretary of state for international trade, has proposed to extend for a further two years tariffs and quotas on 15 categories of steel products to sustain domestic steel production, it said June 23.
The decision, which is expected to be given formal approval in parliamentary business June 30, was welcomed by UK steel producers.
“Today’s decision to maintain the UK’s steel safeguard in full once again shows that the government is backing Britain’s steel industry,” said Gareth Stace, director general of producers’ association UK Steel.
“Huge credit must be given to the determination and purpose shown by the prime minister and the secretaries of state at [the Department for International Trade] and [the Department for Business, Energy and Industrial Strategy] in ensuring the right result was ultimately delivered. As the UK establishes itself as an independent trading nation, they have taken their duty seriously to stand up for jobs in British steelmaking and for the future of this strategic industry.”
The UK safeguards system that is due to expire on June 30 has been under review since late 2021. It mirrors the EU safeguards system, put in place in mid-2018 in response to the US’s imposition of Section 232 import tariffs of 25% on steel imports in March that year.
The UK trade secretary has proposed, on the basis of a Report of Findings from the Trade Remedies Authority (TRA), to extend the measure for a further two years (from 1 July 2022 until 30 June 2024) for the following five steel categories: 6 – Tin mill products; 7 – Non-alloy and other alloy quarto plates; 12 – Merchant bars and light sections; 16 – Non-alloy and other alloy wire rod and 17 – Angles, shapes, and sections of iron or non-alloy steel.
The trade secretary has concluded that, on the basis of the TRA’s Report of Findings there is clear evidence that: “if the measure were discontinued, there would be serious injury or the threat of serious injury to UK producers.” The trade secretary also concluded that the retention of the measure for these categories of steel is in the economic interest of the UK.
For category 12, severe supply problems have been identified, potentially involving associated increased costs to businesses using those products: the trade secretary therefore proposes increasing the tariff rate quota on Category 12a by 126,136 mt to ensure it better reflects trade flows.
According to the trade secretary’s document the steel safeguard measure will also continue to apply on the following 10 steel categories until June 30, 2024, on the basis of grounds raised by interested parties:
1 – Non-alloy and other alloy hot-rolled sheet and strip; 2 – Non-alloy and other alloy cold-rolled sheet; 4 – Metallic coated sheet; 5 – Organic coated sheet; 13 – Rebar; 19 – Railway material; 20 – Gas pipe; 21 – Hollow section; 25 – Large welded tube and 26 – Other welded tube.
The trade secretary did not propose to reapply the measure to the four categories for which the measure was discontinued in 2021 (categories 14, 15, 27 and 28).
Safeguards not long-term solution – UK Steel
“We are aware this extension was not straightforward. Establishing a trade remedies framework for the first time in 50 years was always going to be challenging and the nature of these measures virtually guarantees some opposition from one quarter or another. However, this is not sufficient reason to shy away from using the trade tools now at our disposal and the government has done the right thing today in staying the course and ensuring the UK’s steelmakers are not left to the mercy of a global steel market that suffers from overcapacity and state-induced distortions,” Stace said.
“It is vital we now work with partners like the EU and the US to address the underlying issues that are destabilizing global steel markets. Safeguards are not a long-term solution, and the goal here is a global market for steel where we all play by the same rules,” the UK Steel director said.
June monthly contracts in the UK domestic scrap market fell sharply for the second consecutive month across the grades, with a firmer containerized export market providing little respite volumes-wise for recyclers. UK mill appetite for ferrous scrap was to be relatively low.
S&P Global Commodity Insights’ Platts assessment of 3B shredded scrap was GBP 315/mt delivered to the mill on June 10, down GBP 32.50/mt on month. The OA Plate and Structural scrap assessment for June contracts was at GBP 317.50/mt delivered on June 10, down GBP 35/mt on month.
— Annalisa Villa