The UK steel industry expects prices to rise in 2027, despite generally weak demand forecasts. At the 2026 annual joint meeting of the International Steel Trade Association (ISTA) and the National Steel Association (NSA), participants discussed, among other issues, the launch of the UK carbon border adjustment mechanism and recent changes to safeguard quotas.
The meeting took place on October 22 in Leeds and brought together market representatives. Revised UK tariff quotas were one of the main topics. Participants remain doubtful that domestic production can make up for the shortfall expected to result from tighter import conditions.
According to one speaker, the market remains supply-driven: demand for most products is still weak, although it is not declining. As in the European market, negotiations often revolve around which party will bear the risks. Buyers prefer fixed-price deals that account for duties and potential CBAM charges.
However, the final amount of these charges remains unclear, with questions over data verification and the transparency of raw-material information when buying from rerollers. Traders are therefore reluctant to agree to fixed prices or offer terms that include the charges, as unexpected costs could significantly erode margins. Buyers and sellers are discussing additional contract clauses, such as how to allocate costs if CBAM charges are higher than expected, or deferring payment until the final amount is determined. These proposals have met with mixed reactions.
Uncertainty has also affected safeguard measures. Sellers are increasingly offering deliveries on DAP terms rather than the DDP terms more customary in the UK market, in order to limit the risk of additional import costs exceeding allocated quotas.
According to the UK Department for Business and Trade, the residual quota for hot-rolled coil (HRC) imports was fully exhausted by October 26. India used 94% of its 8,364 metric-ton quota. South Korea used 20.3% of its 2,196-ton quota, while the largest quota, for HRC from the EU, was used up to 65,700 tons out of 93,750.
Imports of finished products could undermine safeguards
Many participants and attendees described the growing influx of finished steel products as a serious problem. In their view, it could neutralize the current safeguards on raw materials and become a way to circumvent CBAM from 2027. As in the EU, there are no quotas for downstream products. Protections are also limited for goods shipped out of the UK for processing and then brought back, or moved in the opposite direction in the same way.
A source closely connected to UK ports reported a significant increase in imports of finished products in 2026. The source said the trend would continue until the government introduced adequate safeguards.
Logistics challenges
Meeting participants also discussed logistical difficulties: persistently high fuel prices are driving up the cost of road and water transport, while changes in the composition of imports are causing serious port congestion. Significant volumes of steel are expected to arrive shortly before the next quarterly review of safeguard quotas.
Sources predict recurring delays; port authorities have already reported some following the recent quota update. Some cargoes did not clear customs by the first day of the quota period, potentially leaving importers liable for duties. The meeting also heard that a surge in goods arriving around quota review deadlines is creating queues across all import categories. A shortage of berths is delaying vessels and increasing the risk of demurrage charges. Additional staff are needed to handle cargo at warehouses and prepare it for onward road transport. Some market participants believe these problems will persist for a long time.
Authors: Charles Thompson, Riley Waters
