Post by account_disabled on Feb 20, 2024 0:51:06 GMT -5
British steel traders have warned that Tata Steel UK, which won £500m in government aid, risks distorting the domestic market for a key steel product by hoovering up a trade quota for lower-cost imports. Tata's move has sparked calls for a review of UK trade measures designed to protect the domestic industry and sparked a row just days after the company won a major taxpayer support package. Traders said Indian-owned Tata Steel UK, Britain's largest steelmaker, had imported large quantities of hot-rolled coil, a benchmark product used to make tubes and other steel structures, from India. Under safeguards set by the Trade Remedies Authority (TRA), specific volumes of hot rolled coils can be imported from the EU, Turkey, Taiwan and "other countries" - which includes India - before a tariff is applied of 25 percent.
The quota system works on a first-come, first-served basis. The industry said that while the EU steel quota is underutilized, Tata had fully utilized the “other countries” quota for two Job Function Email Database quarters. As a result, some importers have been prevented from bringing in steel product from other, usually lower-cost, countries without paying the tariff. "This distorts the market with detrimental consequences for competitiveness and customer prices," said Marco Longhi, Conservative MP for Dudley North, where several steel companies are based. He issued the warning in a letter to the TRA this week, seen by the Financial Times, urging the agency to carry out an “emergency review” of hot rolled coil quotas. According to Longhi, Tata Steel UK will bring in around tonnes of hot rolled coil from India in the fourth quarter, just below the official quota availability for imports from "other countries tonnes.
Through this action, Tata Steel UK will, in effect, make all importers under this tariff pay additional duties," Longhi wrote in the letter. The industry trade body, the International Steel Trade Association, wants the TRA to give a specific quota to Tata Steel UK or increase the quota volumes that can be imported before the 25 per cent tariff is applied. Industry executives said Tata's actions could drive up prices for other domestic importers and older importers, but admitted the steelmaker had not broken any rules. The UK government recently announced a £500 million support package to help the company adopt greener ways of making steel at its Port Talbot site in Wales. Christian De Morgan, chairman of Meridian Steel, a Dudley-based steel company that imports hot-rolled coils from India, said it was facing “significant and potentially unsustainable additional costs as a result of this situation.
The quota system works on a first-come, first-served basis. The industry said that while the EU steel quota is underutilized, Tata had fully utilized the “other countries” quota for two Job Function Email Database quarters. As a result, some importers have been prevented from bringing in steel product from other, usually lower-cost, countries without paying the tariff. "This distorts the market with detrimental consequences for competitiveness and customer prices," said Marco Longhi, Conservative MP for Dudley North, where several steel companies are based. He issued the warning in a letter to the TRA this week, seen by the Financial Times, urging the agency to carry out an “emergency review” of hot rolled coil quotas. According to Longhi, Tata Steel UK will bring in around tonnes of hot rolled coil from India in the fourth quarter, just below the official quota availability for imports from "other countries tonnes.
Through this action, Tata Steel UK will, in effect, make all importers under this tariff pay additional duties," Longhi wrote in the letter. The industry trade body, the International Steel Trade Association, wants the TRA to give a specific quota to Tata Steel UK or increase the quota volumes that can be imported before the 25 per cent tariff is applied. Industry executives said Tata's actions could drive up prices for other domestic importers and older importers, but admitted the steelmaker had not broken any rules. The UK government recently announced a £500 million support package to help the company adopt greener ways of making steel at its Port Talbot site in Wales. Christian De Morgan, chairman of Meridian Steel, a Dudley-based steel company that imports hot-rolled coils from India, said it was facing “significant and potentially unsustainable additional costs as a result of this situation.