Uncertainty continues to remain a key challenge for UK steel sector participants, weighing on demand and prices, said delegates at the National Association of Steel Service Centres (NASS) summer event last week, attended by Kallanish. A lack of clarity on tariffs and the incoming CBAM regulation are meanwhile constraining market activity.
One attendee noted there was a lot of talk about new UK infrastructure projects, defence spending, and the recently released industrial strategy, but “until the [demand] level actually starts coming up, [many] are staying in their lane, [and] being pretty conservative about what their aspirations are”.
The new Industrial Strategy and Infrastructure Strategy have both been welcomed by industry players as supportive for the domestic market, but it will take time for funds to be allocated.
“It’ll be like this for a while,” another attendee said, while a third noted the “full understanding was not there” regarding the incoming CBAM regulations in the EU. At a recent Kallanish conference, panellists were not confident that even half of the market were prepared for the January 2026 start.
It was also highlighted that some European mills were pulling orders forward to fill gaps ahead of the slower summer period, which typically sees slower trade and maintenance being carried out. This would result in some orders being delivered earlier than expected, and others after the maintenance work.
“There is plenty of capacity,” said one attendee.
There was also a tone of displeasure from some during the event following recent changes to the UK tariff rate quotes, with business secretary Jonathan Reynolds revising the safeguards beyond the recommendations. The changes will be implemented from 1 July, giving importers little time to digest them.
It was recently confirmed that the UK steel safeguards are to be tightened beyond those recommended by the Trade Remedies Authority (TRA). This includes new caps on residual quotes and the end of unused allocations being rolled over into new quarters.
“We are not expecting steel consumption to increase anytime soon, it’s still relatively flat,” noted another attendee, adding there is lots of talk from government but not enough action being taken.
The UK steel sector is also grappling with recent changes to the minimum wage and national insurance contributions, which would see costs sharply rise for employers.
One market participant said they were now facing an extra £60,000 ($82,000) in additional costs.
Elsewhere, a lack of definition for green steel continues to cause confusion among market participants, with no industry-wide definition yet agreed.
However, it was noted that some end user sectors such as construction are seeing customers seeking to use green steel in projects, with demand said to be evolving.
Carrie Bone UK
