Steel trade
beyond 2026

We find ourselves at a pivotal point for the UK steel industry, a time of monumental challenge but also great opportunity.

The sector is having to redefine production and business models, reassess raw materials and supply chains, and make huge investments, all in a period of geopolitical uncertainty, rising global protectionism, faltering growth and weak steel demand. The Net Zero transition is happening at a testing time for the global steel sector, and if not managed properly, it could irreversibly change the shape of our industries as we know them.

no other steel sector so far has produced an equivalent report
UK Steel is putting forward concrete policy recommendations on new trade options.
New, Bold steel trade policies
The UK Government has shown ambition and a determination to lay firm foundations for steel. Bold action on trade policy today, alongside a well-thought-out plan on the wider policy package for a competitive steel industry, will secure jobs, skills, economic prosperity and resilience for generations to come. This could serve as the first success of the Steel Strategy and what the Government’s Industrial Strategy could deliver for the UK. The decisions made today will shape the future of the industry.
What is happening in the global steel market?
Non-market excess steelmaking capacity is a major challenge for the global steel industry, driving down profits and increasing emissions. Measured as the gap between global capacity and crude steel production, global excess capacity in 2023 was estimated at 543 million tonnes, which is over 70 times the size of the UK market. 

China is expected to export 100Mt of steel during this year alone. This could meet the entirety of the UK’s steel demand for 13 years.

The last time these levels of Chinese exports were seen, UK steel plants were forced to close and thousands of jobs were lost.

Knock-on market effects

Capacity expansions in steel

Capacity expansions in Southeast Asia and the Middle East are continuing at an alarming rate – these are largely state-funded, mostly for high-emission blast furnaces and often do not correspond to domestic demand trends. Indeed, steel demand is weakening in key markets, notably China, translating into rising oversupply which is dampening steel prices and spilling over into other markets.

In the UK

So far this year alone, steel imports into the UK have increased by 17% year-on-year amid a weak demand environment. The import share so far in 2024 has jumped to 68%, from 60% in 2023 and 55% in 2022. The sharpest import increases have come from non-EU sources, mainly India, Vietnam, China, South Korea, Turkey and Algeria. Importantly, these are also countries that have seen significant increases in imports from China or are within China’s top 10 exporting destinations.

Driving up emissions

Blast furnaces, which are the more carbon intensive steelmaking technology, account for more than 74% of capacity additions in Asia, while 89% of blast furnace energy input globally comes from coal. Over two thirds of steelmaking capacity is in countries that have Net Zero targets later than 2060 or none at all.

Rising protectionism: USA

US Section 232 tariffs, placing a 25% blanket tariff on all steel imports, were introduced in 2018 and will remain in place for the foreseeable future. The US has continued to add further tariffs on Chinese imports and strengthen its trade remedies system.

Expiring in 2026: EU and UK steel safeguards

The EU and UK had responded to the US measures, and the trade diversion they would cause, with safeguards which introduced tariff-rate quotas, but these are due to expire in 2026. The EU is also now stepping up its trade defence.

Rising protectionism: rest of the world

Canada recently imposed a 25% tariff on steel imports from China, while several other countries are also acting to shield their industries from trade diversion through safeguards and anti-dumping measures, including South Africa, Brazil, Turkey, Vietnam, India and Malaysia.