According to sources, the UK's new final protective steel quotas, published by the UK Department of Business and Trade on June 25, have done little to ease market concerns.
"It doesn't satisfy anyone, it complicates the situation, and in my opinion, it will destroy manufacturing companies," Nigel Roberts, managing director of Megasteel Ltd., said in an interview with Platts, part of S&P Global Energy.
Roberts also stressed that the first quarter of 2027 will be difficult, as the introduction of a carbon control mechanism in the UK will put additional pressure on costs in addition to precautionary measures. "The first quarter of next year will be a disaster, there will be no reserves left, but there will only be uncertainty, at the moment not enough people know about this[CBAM]," he said.
Some of the measures taken by the Government were less restrictive than previously proposed. The total volume of duty-free steel imports will be reduced by 51% instead of 60%, which were proposed back in March, and some commodity codes will be exempt from duties due to a shortage of domestic capacities.
"It's better than we expected, but it's still not enough. We expect prices to rise in the UK, but as importers, we expect to receive a quarter of the European quota for hot-rolled coils. The market will tend to buy goods from Europe," said one of the British distributors.
The International Steel Trade Association also expressed disappointment with the overall package of safeguards, citing limited opportunities for buyers to obtain products not available for domestic production in the UK and that they would continue to engage with the government in the hope of a review.
"This is not a good day for an industry they passionately believe in. They predict a shortage of steel and a switch to products made from steel produced abroad," the ISTA said in a statement.
"Despite the fact that we support steel production in the UK, British plants are poorly prepared to serve the market, both in terms of the needs of end users, as well as in terms of vision and financially in terms of providing the usual loan payment terms."
The UK Steel Trade Association, meanwhile, welcomed the measures, but said some of the changes were overly ambitious and could make the supply chain vulnerable to cheap imports. "It is vital that effective measures are taken in the UK to support domestic capacity, jobs and investment," the statement said.
"Final agreements on galvanized steel, packaging