As Callanish became aware from their respective statements, UK Steel and Tata Steel are committed to further improving the recently published EU import quotas.
The Manufacturers' Association says it recognizes the progress made by the UK government, but adds that negotiations between the UK and the EU must continue to increase volumes further as the two regions continue to negotiate a reset. The European bloc accounts for 70% of British steel exports, making it the most important market.
EU quotas for the UK amount to 1 million tonnes, while access to pools and balances under free trade agreements increases the total volume of duty-free steel exports in the UK to 2.14 million tonnes. UK Steel warns that these reserves are likely to be filled quickly by countries with larger production, with the UK "likely" to lose a significant portion of the 1.7 million tons of finished steel it exported to the EU under previous guarantees.
It explains the overproduction as "rampant global subsidies" that have distorted prices on international markets and forced both regions to significantly restrict access to imports.
"Unfortunately, broad-based trade measures have unintended consequences, and outdated multilateral trade rules make it difficult to identify unscrupulous participants who distort the market for everyone," the document says.
UK Steel CEO Gareth Stace says: "Ensuring greater export access to certain types of high-quality steel products will be crucial to the long-term viability and profitability of the UK steel sector. The UK and the EU are interdependent markets, and we hope that both sides will be sensible about each other's needs in the discussions that will take place in the coming months."
Meanwhile, in a separate statement, Rajesh Nair, chief executive of Tata Steel UK, says: "While we recognize the efforts of the UK government in these negotiations, the overall reduction of 60% of guaranteed EU duty-free quotas, combined with recent measures on steel imports to the UK, is likely to have a significant impact on our business in the UK "
"It will take us some time to analyze the specific details of the announcement in relation to various product categories, but given the importance of the EU market to British steel producers, fair and feasible market access remains critical if we are to create a sustainable steel industry here in the UK," he adds.
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