The UK’s new tariff rate quotas for imported steel has no shipping clause, meaning material on the water will be included in the quotas and potentially have to pay up to 25pc duties.
This is despite the UK mirroring much of the European Union’s existing safeguard, which did contain a shipping clause.
The refusal to include a shipping clause is surprising given the duration of lead times on some products. In the coil suite, there is a real threat of duties being applied with offers already out into February-March on cold-rolled coil and hot-dip galvanised steel.
On rebar, it might start a rush for material from Cares-approved suppliers, although participants still have the EU safeguard scheme to contend with until next year.
Some are concerned with the outright quota volumes on certain products, although for most they look broadly in line with recent import trends. On rebar, there may be some allocation issues; sustainable suppliers of Cares-approved rebar are not plentiful, and Turkey and Belarus could have slight issues.
Turkey’s first-quarter 2021 rebar quota of 16,297t looks fair based on the average of first-quarter 2018-19 volumes of 15,689t. But in the first quarter of last year, Turkey imported 21,975t into the UK. Belarus’ January-March quota of 8,249t is slightly below its shipments for the same period of last year, which stood at 11,391t, and 10,000t in the first quarter of 2018.
There is a sufficient quantity in the “other countries” category for rebar, but there are not enough sustainable Cares-approved mills in this segment. Rebar buyers also suggest the historical data do not account for big projects, such as HS2, which could soon be awarded, and mean the quotas need revising.
The other issue is rebar-in-coil, which sits in the general wire rod quota but needs a separate category, according to independent fabricators.
On hot-rolled coil, the other countries’ quota is 46,033t for January-March and 46,544t for April-June. Last year, other countries, except Turkey and EU suppliers, shipped 67,548t into the UK from January-March and 38,661t from April-June. The EU has an allowance of 147,130t in the first three months of 2021 and 148,765t in the next three-month period.
The quotas as announced cannot be amended until July 2021.
By Colin Richardson