Origin and destination of traded UK steel


Origin and destination of traded UK steel
In 2021, almost 70% of UK steel exports are to the EU, whilst almost two thirds
of steel imports were from the EU:
• 68% of UK steel exports are to the EU.
• 62% of UK steel imports are from the EU.
UK steel safeguards
The UK maintains a steel safeguard measure to protect its industry from
cheap imports due to oversupply in the international market for steel
products. The steel safeguard is a quota on imports of certain steel products
above which a 25% import tariff is levied.
On 29 June 2022, the government extended the existing steel safeguard
measure for two years until 30 June 2024. The safeguard for 19 categories of
steel was carried over from the EU. Following a review, the government
decided to extend steel tariff rate quotas (TRQ) for 15 product categories. In
response to concerns of downstream users about difficulties in source some
steel products, the TRQ was removed for four categories.9
Import quotas are set by product category and apportioned to the countries
whose import market share exceeded 5% in 2017-2019 (that is, countryspecific quota). These include the EU, Turkey, China, South Korea, India,
Japan and several others. A residual quota is available to all other countries.
Imports of steel from developing countries are excepted from the safeguard
measure if the goods imported are “less than 3% of the total imports of that
product and if, collectively, these low volume exporters account for no more
than 9% of the total imports of that product.” In January 2023, the
government has initiated a review of the developing country exception.10

 UK Trade Info
HC Deb 29 June 2021 [Steel Safeguards] c297
10 Trade Remedies Authority press release, 23 June 2022
Contribution of the steel industry to the UK economy
8 Commons Library Debate Pack, 23 January 2023
For a more detailed overview and background to the UK steel safeguard
measure see our briefing, CBP 9596, UK steel safeguards (PDF). The protected
steel product categories are on pages 15 to 16.
1.2 Issues in the steel industry
Steel is an energy intensive industry which has seen costs increase
significantly recently. Gas prices increased to record levels after Russia
launched its full-scale invasion of Ukraine and continued to rise during much
of 2022 due to cuts in Russian supply. Electricity prices are linked to gas
prices and have followed a similar trend.
The industry was facing challenges prior to the recent increase in energy
costs. A combination of fierce international competition and high domestic
costs has made many UK steel plants struggle to be competitive in a global
market. UK Steel – an industry body – says that “long-standing uncompetitive
electricity prices having constrained UK investment and steel production for
some time.”11
The Financial Times described the challenges facing the UK steel industry as a
“perfect storm” in 2014.12 These challenges included:
• Massive growth in the volume of steel produced internationally,
especially in China, since the early 2000s.
• Slowing growth in China and other emerging economies means steel
consumption has ceased to keep pace with the growth in production.13

 This has produced a surplus of steel in China, much of which has been
• A glut of steel on the international market has pushed prices down.
• At the same time, the cost of overheads in the UK is high by international
standards. Business rates are also high in the UK, and the strong pound
(prior to the EU referendum) had made UK exports less attractive.
The years around 2015/16 were a period of upheaval in the steel industry, with
a series of plant closures, company mergers and staff lay-offs. The Annex at
11 UK Steel is part of Make UK, the manufacturing trade body previously called EEF; UK Steel Press
Release, UK Steel comments on Liberty Steels restructuring announcement, 12 January 2023
12 Financial Times, UK steel hit by perfect storm of falling prices and high costs, 29 September 2014
[accessed 4 June 2021].
13 UK Steel, Annual review 2014, published 2015, p6; BBC, Britain's steel industry: What's going wrong?,
30 March 2016 [accessed 4 June 2021].
Contribution of the steel industry to the UK economy
9 Commons Library Debate Pack, 23 January 2023
the end of the Library briefing UK steel industry: statistics and policy
describes the events of that period in more detail.
In early 2023, Liberty Steel – a company operating sites across England,
Scotland and Wales – said it would restructure in plans that would potentially
affect up to 440 roles. Plants in West Bromwich, Newport and Tredegar would
be made idle as part of a restructuring of its business. The company said that
the changes are being made “in the face of the UK steel industry’s severe
competitiveness issues”.14 Section 4.2 of the Library briefing UK steel industry:
statistics and policy covers previous concerns over the future of Liberty Steel
in the UK.
Steel producers faced financial difficulties prior to the recent energy price
rises. Most notably, British Steel went into insolvency in 2019 and was
subsequently acquired by Chinese firm Jingye.
15 Tata Steel announced plans
to cut jobs across its European sites in late 2019 and operations at its Orb
steelworks site in Newport were wound down (with jobs redeployed

UK Steel, trade body for the sector,17 highlights that steel production is highly
competitive and that businesses operate with small margins.
18 In addition,
like many other sectors, the Covid-19 pandemic has been a hit to the steel
sector leaving some companies facing liquidity issues. Section 4.1 of the
Library briefing UK steel industry: statistics and policy covers the steel
industry and Covid-19. The sector also faces increasing pressure on
decarbonisation, which will likely see costs of production rise further and will
need increased investment in new technology and processes over the next few
years adding to the challenges facing the sector.19
The steel industry argues that higher UK power costs are causing the industry
to struggle to be competitive in the global market. In addition, options for
decarbonising the steel industry such as Carbon Capture and Storage (CCS),
electrification and fuel switching (e.g. to hydrogen) all require increased
electricity consumption and significant investment. The industry says that
high power costs are therefore hampering their ability to invest in

legal consultations and travel advisor in the States and within UK

Media solutions , Media company , online classes , learn german , learn english , perfect language , blood cord , rehab , rehabiliations , rehabilitation center , magazitta

Post a Comment

Previous Post Next Post

Contact Form