UK rebar buyers concerned over sustainability scheme

Independent reinforcing steel fabricators in the UK are deeply concerned about the sustainable steel scheme proposed by certification body Cares.

There are two points in the scheme that could curtail reinforcing steel supply into the UK, which imports around 40pc of its needs each year.

Firstly, rebar cannot be imported from countries that are more than 1,200 miles away. Secondly, material cannot be purchased from any mill in a country that is rated five or higher on the International Trade Union Confederation global rights index.

This would make around a quarter of the UK's current sourcing — primarily from Belarus, Turkey and Ukraine — unsustainable, according to a letter sent by the British Independent Reinforcement Fabricators Association (BIRFA) to Cares, which was obtained by Argus.

BIRFA said the major European suppliers are "under enormous pressures" as evidenced by their delivery performance.

"BIRFA is extremely concerned about the implications of the proposed new scheme, both its members, and to the whole UK reinforcing steel supply chain. The implications are far reaching, and we are not sure that they are fully understood by government and clients," the letter said.

There is also concern that implementing the scheme's requirements may be too costly for smaller fabricators, which make up roughly 25pc of the market.

UK demand for reinforcing steel is around 1.2mn t/year, across rebar in length, coil and mesh coil. The UK's sole domestic mill, Celsa, said its finished product output is 1.2mn t/yr, but its highest yearly reinforcing steel production is around 750,000t, of which some is exported.

Imports are already complicated by the European Commission's definitive steel safeguard, which caps the amount of product that can be imported. Turkish imports into the EU28 reached 828,466t last year, and 438,958t in 2017. The tariff-free quota for 1 July 2019-30 June 2020 is 301,537t, and 316,614t for the next annual quota period.

This limited quota has seen a rush for bookings, with material then drip fed into various quota periods and the residual quota, which becomes accessible to regions that have fulfilled their own supply in the fourth quarter. Traders and buyers are lobbying for a specific high-fatigue rebar quota for the UK market.

There is a meeting on 25 July to review all the feedback Cares has received on its proposal, and the scheme will likely be implemented by next year.

BIRFA represents independent fabricators, and was formed in September 2015. Celsa owns 40-45pc of the downstream fabrication market in the UK through BRC, Express and ROM.