The UK government has extended steel tariffs for a further two years as part of its “international legal obligations”, trade secretary Anne-Marie Trevelyan has said.
The steel tariffs were put in place prior to the UK leaving the European Union to tackle what the government describes as dumping, whereby countries produce steel at lower than the cost price and sell it on the international market to undercut competitors.
The UK rolled over existing tariffs when it left the EU, which included 19 categories of steel that are imported into the UK. Steel is considered a key UK industry, employing 34,000 people and contributing £2bn to the economy annually.
The extension means that tariffs remain on key steel imports until 2024.
Commenting on the continuation of tariffs, CPA economics director Noble Francis said other concerns apart from tariffs have weighed on the minds of steel producers in recent months.
He said: “The greater issues for steel producers, and steel prices, are because of the spike in energy prices, commodity costs, and the reduction in supply from Russia and Ukraine, not the tariffs.
“The price of concrete reinforcing bars in April 2022 was 62 per cent higher than a year earlier, and the price of fabricated structural steel was 46 per cent higher than a year earlier, according to the Office for National Statistics (ONS).”
According to Francis, 13 per cent of steel imports were sourced from Ukraine and Russia last year, with supply acutely affected due to the ongoing war in the Ukraine.
Francis added: “Commodity price spikes have led to ore and steel price rises, plus steel is energy-intensive and energy costs account for between 25 per cent and 33 per cent of total costs for energy-intensive manufacturers.”
The impact of steel-price rises has been felt across the construction sector.
In May, HS2 chief executive Mark Thurston said the cost of steel had risen from about £350 per tonne to more than £800 per tonne, stating that “you’re seeing a sort of 30-40 per cent swing in the cost of raw material”.