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UK final proposal to keep import curbs on 10 steel categories, revoke controls on nine

Highlights

UK producers' body laments cutting protection 'in half'

Changes made to earlier proposals on stainless and tubes

14 antidumping, countervailing measure continue in place

London — The UK Trade Remedies Authority is recommending continued import safeguards on 10 categories of steel products, ranging from railway materials to stainless-steel bars, based on tariff rate quotas for three years, and to revoke import curbs on a further nine product categories.

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The UK secretary of state for international trade must now decide whether to accept or reject the recommendation, which envisages a progressive annual liberalization of the quotas used over the three years on the controlled products.

The June 11 recommendation, based on evidence from 100 submissions in a reviewed started October 2020, is expected to be accepted before June 30, when the current import safeguards system will expire. The Trade Remedies Authority, or TRA, had published a statement of its intended preliminary decision on May 19, following which analysis of 44 submissions resulted in two changes from the earlier recommendation, relating to stainless wire rod and large welded tubes, it said.

UK Steel, a producers' association, lamented the TRA's final recommendation, which it considers will leave UK producers open to unfair competition and "import surges" from overseas.

UK Steel Director-General Gareth Stace referred to the recommendation to cut current protection "in half" as a "hammer blow" to the UK steel sector.

"On their first major test in a post-Brexit trading environment, the UK's new system has failed our domestic steel sector," Stace claimed in a statement. "In a global market characterised by trade barriers, the UK unilaterally is cutting its safeguarding measures in half whilst the EU and US keep theirs in place. We will become a magnet for huge volumes of steel imports diverted from these markets, threatening the long-term viability of steel in the UK and calling into question the sector's ability to make the major investments required for decarbonisation."

The UK-based International Steel Trade Association has meanwhile said it is in favor of greater liberalization, to allow the flexibility of supply and demand needed to support UK consumer industries' recovery.

Market sources expect the European Union to make a recommendation next week also to prolong the existing EU import safeguards after their scheduled expiry date of June 30, although it was unclear whether this extension might be for one year or three years.

'Evidence of import surge'

An agency within the Department of International Trade, the TRA is recommending extending UK safeguard curbs on 10 product categories, ranging from railway materials to the stainless-steel bars used in corrosive environments in the marine and aerospace industries. For all these product categories, there was evidence of both an import surge over the period of investigation (2013-17) and injury to UK producers, and extension of the safeguard measure was judged to be in the economic interests of the UK, it said. Categories recommended for extension represented 37% by volume (around 3.9 million mt) of average UK steel and iron imports between 2017 and 2019.

The UK produces around 7 million mt/year of crude steel, around 70% of the UK's annual requirement 10.2 million mt, according to UK Steel.

The TRA is also recommending that safeguard measures on nine product categories, including tin cans used in packaging, are revoked. For seven categories there was either no absolute increase in imports or no significant increase in imports over the period of investigation, it said. Categories recommended for revocation represented 18% by volume (around 1.9 million mt) of average UK steel and iron imports between 2017 and 2019.

Latest changes: stainless, tubes

In light of representations made following its May 19 recommendation, changes were made to two product categories, the TRA said. Category 25 (large welded tubes, including those used in offshore wind-farms and the energy sector) will now have its safeguard extended rather than revoked.

The safeguard on stainless wire rod will now however be revoked, instead of extended as previously recommended.

"The TRA also received evidence that extending the safeguard on Category 15 (stainless wire rod, used in industries including automotive and oil/gas pipelines) would hinder the growth of downstream industries which use these products and would face increased costs if imports exceeded the allocated quota. The only known UK producer of stainless wire rod is supportive of the measure being revoked for this reason," it said.

Steel safeguard measures were put in place on 28 categories of steel products by the EU in 2018-19 for an initial period of three years. Safeguards on 19 steel product categories were then transitioned into the UK tariff regime when the UK left the EU Customs Union.

The TRA added that currently 14 anti-dumping and countervailing measures are in place on steel imports into the UK and will continue to provide protection against unfair trade practices.