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HRC supply risk remains after UK import rules extension

A two-year extension of the UK’s import safeguard measures has not addressed the nation’s need for increased steel from overseas producers resulting from the closure of Tata Steel’s blast furnaces at Port Talbot.

Quotas will be extended on all 15 steel products previously covered by the trade protection measure. The quarterly volume quotas for all product categories will be increased by 3.3% for 2024/25 and by 3% in 2025/26. 

The official notice included a two-year exemption from the UK quota system for Ukraine, due to its ongoing war with Russia. However, there was no mention of potential supply disruption resulting from Tata’s closure of its two Port Talbot blast furnaces as it transitions to EAF-based steel production. Tata’s reliance on hot rolled coil imports when it shuts down its blast furnaces has led to concerns that the UK safeguard measures’ volume quota will quickly be filled. This would increase the likelihood of the 25% above-tariff quota being applied to overseas material.  

A temporary suspension of the UK’s import quota for hot rolled coil had been proposed by Tata Steel UK and Kromat Trading in February. Many MEPS sources were hopeful of a resolution to the issue by the start of the current quota period, on July 1. However, the UK’s International Steel Trade Association has informed its members that “the suspension review is an ongoing process” following an enquiry to the Secretary of State.

Potential for ‘severe disruption’ 

MEPS steel market analyst, Jonathan Carruthers-Green, said: “There seems to be very little change in these measures compared with the previous 2022 to 2024 period. 

“Crucially there are no amendments to the hot rolled coil category and no word on when the results of the suspension review and tariff rate quota (TRQ) review – launched in response to Tata’s plan to replace the blast furnaces at Port Talbot with EAFs – will be announced. This could lead to severe disruption. 

“Tata has previously stated that it plans to bring in material from its IJmuiden plant, in the Netherlands. However, the quarterly cap on hot rolled coil from the EU ranges from 185,000 to 190,000 tonnes across the two-year extension period, which is insufficient to meet demand.” 

Resumed talks with Port Talbot workers 

Yesterday (July 1) a statement issued by the Unite union revealed that it had called off its industrial action against Tata Steel’s proposed closure of its Port Talbot blast furnaces. Unionised workers had scheduled a strike for July 8. The steelmaker had subsequently brought forward its proposed closure of both its blast furnaces to July 7. 

After the cancellation of strike action, talks between Tata and the unions have re-started, MEPS understands. 

Alun Davies, National Officer for Community the steelworkers’ union, said that he welcomed the opportunity for further negotiations over the plans which could result in around 2,800 job losses. 

Davies said: “The truth is Tata never walked away from those discussions, and at our last meeting on 22 May all unions agreed to conclude the negotiations and put the outcome to our members. Community will welcome resuming those discussions, but we regret that zero progress has been made since 22 May.”