UK adds 2.3m tonnes to flat product steel import quota

The UK’s Trade Remedies Authority (TRA) has confirmed the creation of a new 2.3 million tonne per year Category 1B quota for steel imported to the United Kingdom for the purpose of downstream processing.

An investigation into a change in the UK’s import requirements, due largely to the closure of Tata Steel UK’s Port Talbot blast furnaces, has resulted in the creation of the new quota. It will exist alongside the current quota, which permits the tariff-free import of almost one million tonnes of Category 1 steel (or non-alloy and other alloy hot rolled flat sheets and strips category) per year. This existing quota has now been renamed as Category 1A. 

Reduced domestic production 

This week, Tata Steel closed its second blast furnace in Port Talbot, South Wales. The shutdown brought a temporary end to steelmaking at the site, ahead of its transition to EAF-based production. Until Tata’s 3.2m tonne per year capacity EAF begins production in late 2027, the steelmaker will rely on imports to meet the needs of its customers. 

After considering the results of a consultation, the TRA’s investigation concluded that this resulted in a clear “change in circumstance” in UK domestic production that would justify an increase in tariff-free import capacity. 

The previous Category 1 quota allocates a quarterly volume to imports from the EU, Taiwan and Turkey, with the residual quota allocated on a global basis. TRA research backed-up the assertions from UK steel importers that the quota was already coming under increasing pressure, exposing importers to the 25% above-quota tariffs. It found that the residual quota had been exhausted across four consecutive quarters between April 2023 and March 2024. 

Commenting on this week’s announcement that the new Category 1B quota would ease pressure on the UK’s flat product import quota, MEPS International steel market analyst Jon Carruthers-Green said: “Importers will be happy with these amendments to the Category 1 quotas as the new system will provide them the flexibility to source material from across the globe with little restriction. Naturally there has been a lot of concern given the ongoing issues with the Port Talbot facility. 

“However, they may be less happy with the timing. The changes were announced yesterday and come into effect today leaving little time to understand the new rules.” 

The Category 1B quota ranges in volume from 582,993 to 595,950 tonnes per quarter from July 1 this year to June 30, 2025. The TRA has applied a 40% cap to any individual country making use of the quota. 

UK’s evolving import regulations 

The TRA’s creation of its new Category 1A and Category 1B quarterly quotas for hot rolled flat products follows its two-year extension of the UK’s import safeguard measures, which now run to June 30, 2026. The UK government also has plans to introduce an EU-style carbon border adjustment mechanism (CBAM), to control the embedded emissions in imported steel, from 2027. 

International Steel Trade Association (ISTA) president Godfrey Watt recently questioned if the new Category 1B quota could be open to abuse. Speaking as part of MEPS International’s Carbon Steel Market: Navigating Trends and Price Dynamics debate at last month’s UK Metals Expo he expressed concern about how effectively the import of steel specifically for “downstream processing” would be monitored and enforced. 

In its Category 1B quota announcement this week, the TRA listed a number of downstream products covered by its definition. They include organic coated sheets, metallic coated sheets, large welded tubes and other welded pipes. 

Also speaking on MEPS’s UK Metals Expo debate panel last month, Tata Steel UK pricing manager, Christiane Taylor, insisted that the TRA’s proposed quota changes were intended to maintain the “status quo” for the UK’s steel importers after steelmaking was paused at Port Talbot. 

• Click here to listen to the Carbon Steel Market: Navigating Trends and Price Dynamics debate, from last month’s UK Metals Expo, ‘on demand’.