British traders fear closures due to quota changes
British steel traders fear the closure of enterprises and job losses as a result of a planned reduction in tariff quotas by 60% and an increase in tariffs beyond quotas to 50%, according to Kallanish.
"Changing quotas won't change anything," says one trader. He questions the proposed quota levels for hot-rolled products in comparison with the actual level of demand, suggesting that domestic producers cannot supply all volumes.
"It would be very risky[to import]. This is extremely difficult, especially considering that CBAM is joining this. You'll almost have to pay a 50% tariff," he adds. "If the price per person rises by more than 50%, it will amount to more than 900 pounds per ton[$1,198t], which will affect all production products. We will witness inflation, or we will import finished products and shut down production."
Another source in the market says that the changes relate to their business. "We don't want to get caught, what's the point of taking that risk?" he says. "The introduction of quotas will halve my trading activity and production volume. Is this enough to keep my business going?"
"In the next six months, we will face the same problem with supplies. UK manufacturing will suffer, especially if producer costs rise by 50% in the next few weeks," he concludes.
Julian Verdun, chairman of the International Steel Trade Association (ISTA), says that the association is "amazed" by the preliminary details of the new measures that have been announced as part of the Steel Production Strategy.
"The new quota figures indicate that steel imports, once these measures are fully implemented, will become virtually impossible for many types of products and origin, as quota management, residue assessment and, consequently, a 50% tax risk will make prices uncompetitive for end consumers," - He warns
.He believes that this may lead to a decrease in activity, investment and exports of finished products. "This inflationary step is completely unacceptable in the current uncertain conditions. ISTA remains committed to supporting steel production in the UK, but it also fully supports steel processing industries and believes that this can be achieved through a combination of imports and domestic production, rather than through a blockade," concludes Verdun.
Another market participant calls the changes "meaningless" and hopes that the UK is "posturing" in an attempt to bring the EU to the negotiating table."[The changes]are not thought out properly. No further developments were considered. It looks like this