EU import cuts threaten UK steel industry stability

The UK steel industry is facing a serious threat after the European Commission announced new measures that could greatly limit access to the European Union, which happens to be the biggest market for British steel.

According to the proposals revealed in Brussels, the tariff-free import quotas would be slashed to about 18 million tonnes, while the tariffs on out-of-quota imports would be hiked to 50%. This change would take EU steel import levels back to what they were in 2013, marking a drop of over a third compared to the projected import volume of 27.4 million tonnes in 2024.

Currently, the EU accounts for 78% of UK steel exports, which translates to around 1.9 million tonnes in 2024. This significant reduction in EU import capacity poses a real threat to the competitiveness and export potential of UK steelmakers.

Concerns about steel flooding the UK market

Another worrying aspect is the possibility that millions of tonnes of steel, which won't make it to the EU market, could end up in the UK instead. With total UK steel demand only reaching 9.2 million tonnes in 2024, this influx could overwhelm the domestic market, leading to dire consequences for local producers.

UK Steel is calling on the UK Government to take strong action by:

• Negotiating for preferential treatment with the EU, including setting up country-specific quotas for UK exports.
• Enforcing stricter domestic import controls to stop the market from being flooded with redirected exports.

Global trade pressures are on the rise

The European Commission’s recent announcement is part of a broader global trend where governments are taking defensive trade measures to shield their domestic steel industries from a flood of heavily subsidized steel exports from Asia.

While the EU’s actions aim to stabilize its internal market, UK Steel is cautioning that these measures shouldn’t inadvertently harm British producers. Currently, imports account for a staggering 70% of the UK’s steel demand, in stark contrast to about 25% across the EU, which makes the UK particularly susceptible to trade imbalances.

Industry leaders are calling for immediate government intervention

Gareth Stace, the Director-General of UK Steel, has labeled the current situation as “perhaps the biggest crisis the UK steel industry has ever faced.”

“The Government needs to act right away to make the most of our trading relationship with the EU and secure country quotas for the UK. If we don’t, the fallout could be catastrophic.

The risk of redirected imports could flood the UK market and be fatal for many of our remaining steel companies,” Stace warned.

Alasdair McDiarmid, Assistant General Secretary at Community, shared these concerns:

“About 80% of the UK’s steel exports go to Europe. Therefore, these new EU measures pose a serious threat to our industry and the thousands of jobs it supports.

The Government has shown strong backing for our steel sector, and now it must move quickly to negotiate favorable treatment for UK producers and bolster trade defense measures to stop diverted imports from overwhelming our market.”

Contact Information

Peter Brennan
Director, Trade & Economics Policy
UK Steel
📞 07557 492095
📧 pbrennan@makeuk.org