UK steel stockholder and processor USP Steels is expanding its processing capacity to 500,000 t/yr after acquiring two decoiling lines from Meridian Steel. Consolidation continues to reduce the number of major operators in the UK hot-rolled coil (HRC) processing market, USP commercial director Jack Locke told Argus.
USP is developing an additional processing bay at its new headquarters in Dudley to accommodate the equipment. The company acquired the former C. Browns Steel site in August 2025 and relocated there in August 2026 following a substantial refurbishment and rebranding programme.
The acquisition will increase USP's number of decoiling lines to seven from five and raise its total number of processing lines to 11, including decoiling, slitting and blanking equipment. The investment adds a third heavy-gauge processing line and an additional medium-gauge line.
Once the new equipment is commissioned, USP will be able to process material ranging from approximately 0.4mm to 25mm in thickness.
USP specifically targeted Meridian's decoiling equipment rather than its slitting lines, Locke said, as the assets complement the company's existing heavy-gauge processing capabilities. Meridian Steel, which is owned by Duferco, shut its UK operations in the summer.
The investment comes during a period of significant consolidation in the UK HRC processing sector. The number of major UK service-centre operators has fallen to three from around 10 over the past three years, Locke estimated.
The shrinking number of processors is increasing the importance of security of supply for UK steel buyers, Locke said. Market participants may face fewer sourcing options, particularly as safeguard quotas continue to limit imports from key origins such as India and Turkey.
The India-specific Category 1 quota for hot-rolled sheets and strips, including HRC, totals 8,364 t/quarter and was around 94pc utilised as of 4 October, just four days after the quarter began. The residual quota, under which Turkish material falls, was fully exhausted in the first days of October too.
Tight import availability could increase reliance on European suppliers at a time when inventories across the supply chain remain relatively low. European mills may seek to capitalise on reduced import competition, while buyers that have delayed purchases could return to the market to replenish stocks.
European mills could respond to tighter import availability and renewed purchasing activity by raising HRC offers into the £800s/t ddp UK, following the decision of UK producers to raise HRC prices to £850/t ddp Midlands for January 2027 delivery.
In addition, buyers face tighter commercial terms, with one major UK producer having reduced its payment period to 30 days from around 60 days previously.
Purchasing decisions are also being influenced by the introduction of the definitive phase of the EU's carbon border adjustment mechanism in 2027, which is expected to affect trade flows, pricing and the competitiveness of imported steel.
