ISTA urges review of UK steel coil import quotas

Quotas for all steel coil products imported to the UK should be reviewed in light of Tata Steel's transition from producer to importer, the International Steel Trade Association (ISTA) has said in response to the Trade Remedies Authority (TRA).

The ISTA said Tata's imports of hot-rolled coil to enable the production of cold-rolled and hot-dip galvanised coil (CRC, HDG) could affect imports of the latter, meaning that volumes will also need to be reviewed. ThyssenKrupp Materials Trading said all flat-rolled steel quotas should be suspended during Tata's transition to an electric arc furnace, as its "lack of feedstock" could affect production of downstream products, such as CRC and HDG.

Trading firm Kromat said the TRA's idea of apportioning quotas to importers based on historical volumes "potentially denies market opportunities to others and goes against the principle of fair trade". The TRA had initially said it was considering changing the quota for HRC to global, rather than country by country, and giving importers their own slice of this quota. The TRA is meeting ISTA members in London today, 28 February.

A number of newer businesses, or those that historically purchased from Tata but will now increase imports, are concerned about individual importers receiving their own volumes.

Steel service centre Sebden said a quota for individual importers is "deeply anti-competitive" as it could "place too much power in too few hands", referring to the large traders importing to the UK. Sebden also questioned whether slab should be given its own quota, although this is not possible as there is no domestic production.

"As there are no safeguard or anti-dumping measures in place for slabs then there is a very real anti-competitive risk that Tata could, for instance, import cheap Chinese slabs, free from duty, then reroll into HRC or other downstream products", it said.

It also argued that Tata could use "cheap Chinese slab" to feed its own distribution arm, which would then "have an unfair price advantage in the UK for sales to end-users".

Chinese majority-owned trading firm Duferco, a supplier to Sebden and one of the biggest importers to the UK, said the TRA's proposed suspension of import quotas for HRC should be extended to nine months to "promote purchasing activity". Customers buy imported steel on a three-to-six month lead time, so a three-month suspension is insufficient, it said. Sebden echoed this, suggesting that the suspension should be for nine months.

Trading firm Stemcor, which is owned by a Chinese state-owned entity, said there should be a review into dumping duties against China. "How can Chinese imports represent a danger to the UK steel industry if there is no such industry", it said.

By Colin Richardson