Activity for hot-rolled coil in the UK remained subdued during the week of Feb. 19 as most buyers continued to forgo the market owing to weak end-use demand and uncertainty surrounding the review of the country’s steel safeguard measures by the Trade Remedies Authority.
Market contacts continued to report poor UK demand with little sign of improvement in the near term.
Offers from European mills were generally heard across a range of GBP675-700/mt DDP West Midlands.
Offers for non-EU-origin HRC were heard in a range of GBP620-640/mt DDP West Midlands, with market participants suggesting that uncertainty regarding the future of the UK steel safeguard measures on HRC is weighing on demand.
On Feb. 9 the TRA announced that it would review the suspension of the safeguard import quotas in response to Tata Steel UK’s plan to idle its two blast furnaces later in 2024 and replace them with electric arc furnaces.
At the time the TRA stated that its preliminary view would be to suspend the measure for nine months because Tata Steel is the UK’s sole HRC producer.
Tata Steel hopes to commission its EAF early 2027 and will import steel products for customers from its Dutch and Indian operations or third parties until then.
TRA is collecting feedback until Feb. 25 for the review.
According to traders, the current weakness in the UK market has been exacerbated by uncertainty surrounding the measure which, if suspended, is likely to increase orders for non-EU HRC which is currently priced approximately GBP50/mt sourced material.
“A quota suspension will lead to a run on HRC from all non-EU origins except those currently under sanction,” one trader said, adding that India was a “particularly attractive target” given its prices and lead times to the UK market.
While buyers are reluctant to commit given the uncertainty surrounding the future of the trade measure, market participants noted that buyers cannot wait for a final decision from the TRA with purchasing for May and June currently below the market requirement.
“Distributors need material for May and June, and April will be too late to purchase material for this period,” one supplier told S&P Global commodity Insights.
Platts assessed HRC at GBP670/mt ($846/mt) basis DDP West Midlands Feb. 22, unchanged from Feb. 15.
Author Euan Sadden, euan.sadden@spglobal.
