MEPS: UK steel prices rise as import quota plans trigger panic buying

UK steel prices increased sharply in April after the publication of provisional import quota details sparked concerns over supply availability, according to market analysis by MEPS International.

The UK Department for Business and Trade (DBT) confirmed on April 7 that tariff-rate quotas (TRQs) will be reduced by 60% from July 1, while above-quota tariffs will double to 50%. While the policy direction had already been outlined in March, newly released product-specific quota volumes have unsettled market participants.

Despite weak end-user demand, several MEPS respondents reported “panic buying” among stockholders seeking to secure material ahead of the new regime.

Sharp cuts to import volumes

The provisional quotas show significant reductions across key product categories. For hot rolled coil (category 1A), annual volumes have been cut by around 90%, with similar reductions applied to EU-origin material. Other categories, including merchant bars, sections, rebar and wire rod, also face substantial quota cuts.

Excluding a specific quota category introduced to support downstream processors, overall access to tariff-free imports is set to decline by roughly 60% — exceeding the 47% reduction recently agreed by the European Union.

Rising price expectations and supply concerns

Market participants expect further price increases, with many already factoring in the impact of 50% tariffs on out-of-quota imports. In response, ArcelorMittal Flat Europe has adjusted its delivery terms for UK orders.

While higher prices may temporarily support stock valuations, concerns are growing over competitiveness. Industry bodies warn that rising costs could put pressure on service centres and manufacturers, particularly given limited domestic production capacity for certain products.

Trade associations have also raised concerns about potential supply gaps. The UK currently relies on a relatively small number of domestic producers across key product segments, increasing dependence on imports.

Balancing protection and supply security

The UK government argues that the measures are necessary to address global overcapacity and declining domestic production, which has fallen sharply in recent years. The country’s steel strategy aims to increase the share of domestic supply in UK consumption.

However, the sector continues to face structural challenges, including ongoing restructuring and reliance on government support. Market participants also highlight the importance of continued access to export markets, particularly the EU, as negotiations on future trade conditions continue.

Source: MEPS, Photo: Fotolia