The UK is to review the suspension of the safeguard import quotas on hot-rolled coil in response to Tata Steel UK’s plan to idle its two blast furnaces later this year ahead of building an electric arc furnace, the UK Trade Remedies Authority said Feb. 9.
The TRA’s 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.
“Given the importance to the UK economy of managing the projected reduction in domestic production of hot rolled flat and coil steel, we are carrying out the reviews in parallel with the consultation between Tata Steel UK and trade unions,” the TRA said.
Tata’s UK blast furnaces have an installed capacity of 5 million mt/year but produced 3.2 million mt in the past few years. The new EAF will have a capacity of 3 million mt/year.
News of the possible suspension of quotas was welcomed by market participants.
“A suspension would open the market up to free and fair competition and will be welcomed by traders, service centers and traders alike,” one UK trader said.
The TRA has opened a tariff rate quota review parallel to the suspension review as Tata Steel and UK trader Kromat have applied for a review whether the current tariff-rate quotas would be appropriate overall. The TRA expected the TRQ review to take longer than the suspension review.
It is considering whether it is appropriate to change the method of allocation to give importers an individual allocation of TRQs. The proposed scheme would not tie quotas to an individual country so that importers would be free to choose the source of imports.
TRA is collecting feedback until Feb. 25 for both reviews.
Similar to the EU’s safeguard import quotas on steel, the UK’s were set to expire June 30 but the TRA has been investigating whether they should be extended by two years.
UK HRC import quotas balances differ by origin.
UK steel trade organization ISTA said earlier this year the import quota system would need to be overhauled not only because of the idling of blast furnaces but also because Tata Steel has already been importing HRC from India to substitute its UK production over the past year.
The UK is a net steel importer. In 2022, the UK met 55% of its demand with imports, according to UK Steel.
The import quota for hot-rolled coil of the other country quota — which includes Indian material — in the current quota period (Q1 2024) was exhausted by Jan. 18. The quota was set at 22,589 mt. Any excess material faces a 25% duty.
The quota for the EU remained open as 262,006 mt of material — as of Feb. 9 — can still be imported. The quota for Taiwanese material has achieved critical status, which means a duty deposit needs to be paid as the quota is at risk of exhaustion — 1,378 mt could still be imported Feb. 9. The quota for Turkey remained open, at 37,100 mt.
Author Laura Varriale, laura.varriale@spglobal.com
