According to the latest market evaluation by UK-based steel supplier All Steels Trading Ltd., the UK steel market is entering a major structural shift as existing safeguard measures approach expiry in June 2026 and as stronger protectionist policies are under consideration. The report warns of significant price escalation driven by the EU’s CBAM already in force, pending UK safeguard amendments and the planned introduction of a UK CBAM from January 1, 2027.
According to the report, EU and UK mills have implemented merchant bar increases of £40/mt, while hollow and structural sections have risen by £50/mt. UK safeguard quotas for the first quarter were exhausted on the opening day across many long product categories, with All Steels reporting a £300,000 duty charge.
Quotas may be halved, duties could double
Industry speculation suggests that from July 1, 2026, UK safeguard quotas could be cut by up to 50 percent, while out-of-quota duties may rise from 25 percent to 50 percent. If implemented, such measures would materially reshape supply dynamics and pricing across the UK steel market.
Rising input costs - scrap, gas and transport
Cost pressures are intensifying across raw materials and energy. Scrap prices have increased steadily, with a $30/mt rise translating into roughly £25/mt higher manufacturing costs. European gas prices remain elevated at around €31.55/MWh, while freight costs have also firmed up.
Meanwhile, supply constraints are tightening, with 7-Steel facing an outage of four to five weeks, with Tata Tubes recovering from a January shutdown, and quotas allocated for Turkey exhausted in multiple categories, limiting new arrivals. British Steel output is reported to have slipped as production is prioritized for rail and export contracts.
The report concludes that 2026 pricing will be driven more by protectionist policy than by demand fundamentals. All Steels expects total price increases of £150-£200/mt this year and has opted not to forward-sell for the third quarter amid regulatory uncertainty.