Government’s steel sector approach poses threat, CBM warns

Thousands of manufacturing jobs could still be lost in the domestic supply chain if the government does not reconsider its approach to steel safeguarding.

The warning comes from the Confederation of British Metalforming (CBM), which has seen its 200+ members severely impacted from tariffs designed to protect parts of the UK steel production sector that are currently ill-equipped to meet actual domestic demand.

This means Tier 1s and subcontractors to automotive, aerospace, construction and general engineering have been paying hundreds of thousands of pounds to import their ‘Category 12’ steel – including critical quality and performance bar and section – from European mills, as the quarterly tariff-free quotas are running out within a month.

Recent pleas from the CBM to remove engineering metals under the 7228 code has seen the government act, almost doubling the available quotas for this category before the 25% tariff kicks in.

Whilst this move is welcomed as a small sign of progress, it does not go far enough to remove the unnecessary financial cost and injury being felt down the supply chain and raises the very real prospect of lost orders and production being moved away from the UK.

“We acknowledge the substantive increase in the Category 12A quota and welcome the motivation to rebalance an unfair and severely damaging position that has led to it,” explained Steve Morley, president of the CBM. “However, during this quarter the Category 12A quota on imports from Europe exhausted within one month. Doubling that quota will not, therefore, prevent exhaustion, it just pushes it a month further down the line.”

He continued: “That means CBM members will continue to have to operate with a high level of uncertainty and jeopardy. A continuation of that jeopardy over a further two years, will mean continued questions from overseas holding companies about the viability of manufacturing in the UK. Even at reduced levels, tariff costs will continue to injure these businesses unjustifiably.”

CBM is keen to support a vibrant UK steel industry that delivers world class performance and quality at a cost that is competitive.

Recent investment by British Steel in Scunthorpe is a shot in the arm for the sector, but there is a need for other major players in the industry to show the same level of commitment to producing steel in the volumes and specifications required by UK manufacturing.

CBM
www.thecbm.co.uk