The UK Government has officially approved changes to the tariff rate quotas for Category 1 steel imports, following a recommendation by the Trade Remedies Authority (TRA).
With steel production on the decline domestically, these adjustments aim to ensure a fair distribution of resources between commercial and downstream processing sectors. The new quotas will come into effect on 1 October 2024.
What Does This Mean for the UK Steel Industry?
As part of the revision, Category 1 steel imports — which account for a significant portion of global steel production — will now be split into two categories: Category 1A and Category 1B.
This restructuring was introduced to address the reduction in domestic steel output and to ensure the smooth operation of both the commercial and processing sectors.
- Category 1A: Reserved for commercial use, this subcategory will retain its current import quota of just over 1 million tonnes annually.
- Category 1B: Allocated for downstream processing, this subcategory will see an increase in the import quota, set at 2.3 million tonnes per year, 132% higher than that of Category 1A.
In total, the combined quota for Categories 1A and 1B will sit at 3.3 million tonnes annually, maintaining a balance between the commercial steel market and domestic processing operations.
TRA’s Role and the Global Steel Landscape
The Trade Remedies Authority (TRA), established to review trade practices post-Brexit, has played a pivotal role in determining these changes. Following a thorough investigation, the TRA concluded that revising the quotas was essential due to shifts in both domestic production and global trade dynamics.
To prevent any single country from dominating steel imports, the Category 1B quota will be subject to a 40% cap per country. This measure will help UK companies create stable supply chains while ensuring a competitive marketplace.
“The safeguard measures are critical to ensuring the UK steel industry remains competitive amidst global challenges,” said a TRA spokesperson in a recent press release.
Suspension Review: What Comes Next?
In addition to the TRQ review, the TRA has also been conducting a suspension review at the request of Tata Steel UK (TSUK) and Kromat Trading Ltd.
This review was initiated as TSUK, a major steel producer, plans to shut down its blast furnaces in Port Talbot, Wales, and transition to more sustainable electric arc furnaces.
Although the TRA initially proposed a temporary suspension of the safeguard measures while the TRQ review was completed, the complexity of both investigations delayed this decision.
The Secretary of State for Business and Trade has now requested that the TRA reassess its suspension recommendation, with input from interested parties accepted until 13 October 2024.
Safeguard Measures at a Glance
To better understand the scope of these changes, let’s break down the specifics of the new steel quotas:
Category |
Allocation Purpose |
Annual Quota (Tonnes) |
Tariff if Exceeded |
|---|---|---|---|
| Category 1A | Commercial Use | 1 million | 25% |
| Category 1B | Downstream Processing | 2.3 million | 25% |
| Total | – | 3.3 million | – |
If import volumes exceed these quotas, companies will face a 25% tariff, a significant cost that could impact profitability.
Why This Matters
These quota revisions are not just bureaucratic changes — they’re essential for the future of the UK steel industry. As the country adapts to the post-Brexit global trade environment, safeguarding domestic production and ensuring equitable access to steel imports are top priorities.
By splitting the Category 1 quota into two distinct streams, the Government aims to protect the interests of both commercial and processing sectors, preventing market imbalances and promoting sustainability.
Moreover, the TRA’s ongoing suspension review could signal further adjustments. The industry’s shift toward environmentally friendly steel production, such as electric arc furnaces, will likely continue influencing policy decisions.
Final Thoughts
With the new Category 1 steel quotas coming into force on 1 October 2024, the UK steel sector stands at a pivotal moment. These changes represent not only a response to declining domestic output but also a strategic effort to align with global trade practices.
For businesses importing steel, staying informed of these developments is critical to avoid unexpected costs and navigate the evolving landscape successfully.
For now, all eyes remain on the TRA as it reassesses the suspension review, with further updates expected before the year’s end.
Sources: THX News & Trade Remedies Authority.
