UK extends steel safeguard measure for two years

UK Secretary of State for Business and Trade, Kemi Badenoch, has extended the steel safeguard measure on all 15 product categories for two years to June 30, 2026, the Department for Business and Trade said June 26.

The UK's Trade Remedies Authority (TRA) started an extension review of the steel safeguard measure in September 2023, which looked at whether serious injury would recur to UK steel producers if the measure was removed.

The TRA had recommended in April that the measure be extended on all 15 product categories for a further two years, as it found it was likely that UK producers would be seriously injured in all categories if the measure expired.

The department said Badenoch had made her decision after considering the TRA's evidence and wider matters in the public interest.

It said that, while the decision represented a departure from the UK's obligations under the relevant World Trade Organization agreement, that had been balanced against the TRA evidence and the UK's public interest.

The UK's extension came a day after the EU decided to extend its steel safeguard measures for two years.

Badenoch also decided to extend the application of the suspension for Ukraine to the same date, as it was in the UK's public interest.

"This decision ensures imports of Ukrainian steel will not be subject to the additional safeguard quotas and duty. This is in line with the UK's commitment to support Ukraine in the war with Russia," the department said.

Decision welcomed by UK Steel

UK steel association UK Steel welcomed the safeguard measure extension, saying it was "hugely significant."

"This is a major decision for the UK's steel sector. Safeguards are an essential trade remedies tool used to shield industry from surges in imports as a result of trade diversion and distortions in international trade," it said, adding that, not only were all the reasons for the safeguards still in place, but conditions had deteriorated.

"Trump era Section 232 tariffs continue to deflect trade to exposed markets, while global steelmaking overcapacity of 60 times the UK market continues to rise against a backdrop of high costs and weak steel demand," UK Steel said.

"Robust trade defense sits at the heart of a well-functioning steel market, correcting for trade distortions elsewhere and ensuring fair competition," it added.

UK Steel said that focus would now have to shift beyond 2026, as the safeguards could not be extended past June 30, 2026, according to WTO rules and the issues in the sector would not disappear with global steelmaking capacity increasing.

The association said it was working on new models for future remedies.

"While today's extension of the steel safeguards has bought us some time, we are acutely aware that the trade challenges we face will persist beyond 2026. Global excess capacity is fast approaching unsustainable levels, fueled by state subsidies and mostly from high-emission blast furnaces," UK Steel Director General Gareth Stace said.

Stace said addressing excess capacity was not just a trade objective, but should also be part and parcel of any carbon leakage strategy as well.

"UK authorities and the steel sector must now assess and revamp the trade policy toolkit, form alliances with like-minded countries and boldly challenge the rules-based system so that it works for the UK. UK Steel is committed to working with officials and the TRA to prepare for what the post-safeguards future has in store," Stace said.

Platts, part of S&P Global Commodity Insights, assessed the weekly UK hot-rolled coil price at GBP600/mt ($758/mt) DDP West Midlands on June 20, down 6.3% from the start of 2024.