Tata Steel purchased slabs from British Steel amid US demands

The company was looking for ways to avoid the threat of US steel tariffs if quotas were agreed

British Steel sold slabs to its competitor Tata Steel, according to The Guardian.

According to industry sources, British Steel’s Scantrop steelworks, currently controlled by the British government, has been supplying slabs to Tata’s plants in South Wales in recent months.

Tata Steel was looking for ways to avoid the threat of US steel tariffs. At the heart of the disagreement between the parties was the US insistence that steel must be “melted and cast” in Britain to qualify for tariff exemptions. Tata closed the country’s last blast furnace last year, and its Welsh plants were dependent on purchasing slabs from other sources. However, the UK later postponed negotiations with the US on steel tariffs under certain quotas, seeking instead to agree on a permanent guarantee of a 25% tariff level.

Tata Steel’s decision to buy steel in Scunthorpe, The Guardian notes, is a relatively unusual move for competing companies to cooperate. Pending the completion of electric arc furnaces, the Indian steelmaker planned to import slabs for British production from its other plants in the Netherlands and India.

According to sources in the steel industry, this move was attractive to Tata in light of the opportunity to circumvent the proposed US trade rules.

Tata Steel signed a non-binding letter of intent (JLoI) with the Dutch government to switch to low-carbon steel production at its plant in Eemeden. The company plans to reduce emissions at its plant in the country as part of a project that could cost €4-6.5 billion. The state’s contribution will reach €2 billion. The Dutch division of the company has also applied to the EU Innovation Fund for €300 million.