The UK's plans to protect the steel industry will face a backlash from the industry in the run-up to July
The UK steel market remains largely opposed to the new trading quota system; despite expectations, this will provide significant support to the domestic price level.
Speaking at a networking event of the International Steel Trade Association on June 11, market participants criticized the proposed quotas, which will take effect on July 1, and were skeptical that any changes would be made to the proposals before the measures began, despite additional pressure exerted by trade unions this week.
Other sources at the exhibition referred to the systematic inability of British steel manufacturers to either meet product demand or actually produce certain types of steel. For example, a hot-rolled roll with a width of more than 2 meters is not produced in the UK domestic market, which forces consumers to look for this material abroad. However, even though it is not produced domestically, it still falls under the general category 1A quota for HRC.
The Category 1 quota has been significantly reduced by UK policy makers. A revised annual quota of 68,226 metric tons has been proposed for raw materials produced in the EU since July 1, which is about 90% below the quota level established under current measures. A new country quota has been proposed for South Korea, providing for the allocation of only 3,258 tons per year. India will also have its own annual quota of 12,405,000. Tons.
The ISTA organization has repeatedly called for a significant change in the proposed precautionary measures as part of the UK's steel production strategy, stating via LinkedIn that steel imports will be carried out after these measures are fully implemented. In practice, this will be almost impossible for many products, and that 50% tax risk will make prices uncompetitive for end users.
"I expect prices to rise regardless of demand," a source at the service center said at the event. "It's really going to slow down the market, and unless something changes, certain brands just won't appear."
From the same source, he said that he expects that the recent fire at the Tata Steel plant in Port Talbot will have little impact on the UK's final quota decision and that it may only affect the supply of hot-rolled products with etching and oiling.
The Platts agency, part of S&P Global Energy, estimated the HRC[S275JR]in the UK on June 11 at 705 pounds per ton compared to the West Midlands, which is stable week after week, but since the beginning of the year it has amounted to 190 pounds per ton.
Despite the fact that the overall attitude to demand