Tata Steel鈥檚 海角视频 boss has warned of a 鈥渄ifficult鈥 future ahead amid EU plans to slash tariff-free steel import quotas, prompting an urgent call for the 海角视频 to create a 鈥渓evel playing field鈥.
Rajesh Nair, chief executive of Tata Steel 海角视频, urged 海角视频 ministers to safeguard the domestic market after the EU announced plans to impose 50% tariffs on steel, double the current level of 25%, while cutting tariff-free import volumes to 18.3 million tons a year 鈥 a 47% reduction.
The EU remains the destination for nearly 80% of 海角视频 steel exports, including a significant share from Welsh producers.
Concerns have also been raised by Cardiff-based electric arc furnace steel maker 7 Steel (formerly Spanish-owned Celsa).
As it stands Czech-owned 7 Steel said the planned EU restrictions risk cutting off access to its most vital market and flooding the 海角视频 with redirected steel, from producers such as the Chinese, and undermining domestic demand and destabilising local supply chains.
The 海角视频 currently imports more steel from the EU than it exports into the single market - some 3.7 million tonnes to around 1.6 million. Currently 海角视频 quotas on imported EU steel don't really apply as they range from 70% to 140% of domestic demand.
It is hoped that the 海角视频 will have significant leverage to be able to negotiate a more equitable trading arranging with the EU on steel then currently proposed
The 海角视频 can also point to greener steel making by 7 Steel, with Tata Steel 海角视频 also moving to an electric arc furnace model of making steel from scrap steel at Port Talbot.
Global steel overcapacity stood at over 600 million tonnes in 2024, representing 24% of total capacity. The OECD forecasts this to increase to 721 million tonnes by 2027, in part driven by China where steel producers receive state subsidies around ten times the OECD average.
Carles Rovira, chief executive of 7 Steel 海角视频, said: 鈥淭his is a critical moment for our industry. The EU鈥檚 decision risks severing the lifeline of Welsh steel exports and unleashing a wave of redirected imports that could overwhelm our domestic market.
"We stand with 海角视频 Steel (industry body) and other 海角视频 producers in urging the 海角视频 Government to act decisively by negotiating country-specific quotas and tightening our own import controls to protect jobs, communities, and the future of steel in Wales.鈥
鈥淭he proposal lacks essential clarity on timescales, transition arrangements, and the allocation of country-specific quotas 鈥 all of which are critical to business planning and supply stability. Without this detail, the market faces heightened uncertainty that could drive volatility in pricing and investment decisions across the industry.鈥
鈥7 Steel 海角视频 urges the 海角视频 Government to negotiate country-specific EU quotas to safeguard export access while introducing new domestic trade measures 鈥 such as strengthened import safeguards and targeted support for strategic producers
".We are proud of our role in Cardiff鈥檚 industrial heritage and future. But without swift and strategic intervention, this policy shift could undo decades of progress in high-value steel production and regional regeneration.鈥
7 Steel employs over 1,600 people across the 海角视频, with 1,138 based in Wales. As well as its electric arc furnace mill in Cardiff, it employs 300 at four fabricator site in Neath Newport, Crumlin, and Whiteheads.
Mr Nair called on the 海角视频 Government to design new quota systems in a similar way to the EU to safeguard steel by banishing imports, 鈥渢o ensure we have a level-playing field鈥.
He said: 鈥淵es, you could look at it as an existential crisis or you could look at it as an opportunity to make a difference and I think the conversations that are happening today are 鈥楬ow can we convert this into something that would work for the 海角视频?鈥.
Tata is investing 拢1.2bn, which includes 拢500m in finance from the 海角视频 Government, in building a new electric arc furnace at Port Talbot after the ending of blast furnace primary steelmaking last year. Work on the project is under way and is scheduled for completion in late 2027.
Mr Nair warned trade wars and protectionism in steel have become the norm, 鈥渟o we鈥檝e got to find our own ways of managing the domestic market鈥.
He told Senedd members: 鈥淭he 海角视频 quotas are significantly disproportionate. These quotas were set up, particularly in flat steel 鈥 in which south Wales is really a significant player 鈥 in 2017/18 when the demand was nearly 30% higher than what it is today.
鈥淭he demand has declined, the quotas have remained where they are. The quotas in genera are 70% to up to 140% of the demand in some product categories.鈥
Mr Nair contrasted this with EU quotas of between 15% and 30% of demand before the latest announcement which will see levels reduce further.
He said: 鈥淭he key thing is the trade situation is becoming more and more difficult, and things are moving pretty fast, so one of the expectations is that we need to bring pace into it.
鈥淏ut I鈥檓 reasonably confident that the government will also look to do things very similar to what the EU has done.
鈥淥n one hand to protect the 海角视频 domestic market and, on the other hand, to work with the EU to ensure we have the right trading interests between the two.鈥
The EU is the 海角视频鈥檚 largest steel export market, worth nearly 拢3bn.
The new plans were set out following pressure from some member states which have struggled to compete with cheap imports from countries such as China.
Appearing before the Senedd鈥檚 economy committee, Mr Nair called for clarity on how the EU announcement will work and apply to different categories of products.
The chief executive said the first intent would be to work with the EU to secure preferential treatment and concessions as one of the bloc鈥檚 biggest long-time trading partners.
Giving evidence just over a year on from the end of traditional steelmaking in Port Talbot, Mr Nair was pleased by progress on transitioning to an electric arc furnace at the site.
He said: 鈥淚 would like to believe we鈥檝e dealt with it in the best possible manner, in the most responsible manner and, one year down the line, I鈥檓 happy to see the progress being made, especially on the project in terms of bringing the EAF online by the end of 2027.鈥
Mr Nair said he had 鈥済reat confidence鈥 of hitting the 2027 target to start green steelmaking in south Wales after securing planning approval and breaking ground in July.
He told the committee that orders have been placed for about 拢400m worth of equipment but construction on the ground, which is due to begin in the next few months, will be the key test.
Chris Jaques, chief HR officer, said Tata Steel 海角视频 employs just under 5,900 people, down from about 8,150, confirming 2,255 staff have left the business since the announcement.
Mr Jaques told the committee compulsory job losses were minimised to about 120 and Tata Steel 海角视频 expects to employ about 5,300 people when the EAF is fully commissioned.
Mr Nair was asked about the 海角视频 Government passing an emergency bill to protect steelmaking by keeping blast furnaces open in Scunthorpe 鈥 but not Port Talbot. He said Tata Steel had a viable transition plan but Scunthorpe was a 鈥渄ifferent story鈥, confirming no talks took place on including Port Talbot in the rescue legislation.
As part of its inquiry on the future of steel, the committee also heard from trade unions which warned commitments on future investment have fallen by the wayside.
Alasdair McDiarmid, assistant general-secretary of the Community union, said: 鈥淲e鈥檙e not where we wanted to be. All of the trade unions thought there was a possibility of a more gradual transition which would have protected jobs and primary steelmaking for longer.鈥
He added: 鈥淏ut the reality is this is where we are: those blast furnaces are not coming back on 鈥 whatever some irresponsible politicians might want to suggest.鈥 Tom Hoyles, a senior organiser from the GMB union, told Senedd members: 鈥淭here鈥檚 obviously a lot of anger at what鈥檚 happened but, in one respect, that is done. However, the bigger questions around Port Talbot and British steelmaking remain.
鈥淲e鈥檝e seen the announcement in the past few days 鈥 it is a very, very volatile sector.鈥
As previously reported, Ms Evans had told the Senedd on Wednesday: 鈥淲e鈥檙e extremely concerned [about] the EU鈥檚 announcement on the new tariff measures, and what they will mean for the steel industry in Wales and the 海角视频.鈥
She stated Labour ministers are pressing their Westminster counterparts to engage in urgent discussions with the European Commission to ensure Welsh steel is not left behind.
Luke Fletcher, Plaid Cymru鈥檚 shadow economy secretary, however, criticised the 鈥減anic-mode鈥 海角视频 Government for being 鈥渂lindsided鈥 by the announcement.
Mr Fletcher told the chamber: 鈥淭his really is crunch time for the Welsh steel industry.
鈥淭he EU decision to almost halve tariff-free quotas for imported steel threatens to cut off access to our biggest export market, with industry leaders warning of this perhaps being the biggest crisis the 海角视频 steel sector has ever faced."
Pointing to Labour鈥檚 pre-general election promises of a new relationship with Europe and to 鈥渕ove mountains for steel鈥, he said: 鈥淵et, a year on for Port Talbot, here we are again.鈥
Mr Fletcher called for action to ensure Welsh plants, such as Port Talbot and Llanwern, are not left to bear the brunt of a tariff war between Brussels and Washington 鈥 with the EU鈥檚 move widely seen as a response to US tariffs.
鈥淥ur steel communities can鈥檛 take much more,鈥 he said.
鈥淎nd there鈥檚 already a track record from the Labour 海角视频 Government of safeguarding steel plants in England.鈥
Ms Evans replied: 鈥淭he EU鈥檚 proposal clearly has the potential to have drastic consequences for the Welsh steel sector at a time when it is already under immense trading pressure due to the US tariffs and global overcapacity.鈥
Samuel Kurtz, the Conservatives鈥 shadow economy secretary, warned steel products from China could flood the 海角视频 as a result of continental markets closing their doors.
Mr Kurtz also expressed concerns about the 海角视频鈥檚 comparatively high electricity costs amid a transition away from blast furnaces to an electric arc furnace at Port Talbot.
Wales鈥 Economy Secretary Rebecca Evans has already warned of 鈥渄rastic consequences鈥 for the future of Welsh steelmaking and pledged to do 鈥渆verything we can鈥 to influence 海角视频-EU talks over the plans to cut the amount of tariff-free steel than can be imported into the bloc by nearly half."
Andrew RT Davies MS, chair of the Senedd鈥檚 Economy, Trade and Rural Affairs Committee said: 鈥淚 am deeply concerned about the future of our steel industry. In light of the European Commission鈥檚 announcement on steel and the increasingly volatile global trading environment, the 海角视频 Government must act decisively to highlight the damage to both sides of a damaging tariff led trade war.
" It is also essential to establish a responsive trade defence regime to ensure 海角视频 industries can compete on a level playing field.
鈥淥ur committee is disappointed to learn that local union representatives have been excluded from the Transition Board 鈥 the body established to support people, businesses, and communities affected by the decision to close the Port Talbot blast furnaces.
鈥淟ocal union representatives possess valuable, firsthand insight into the impact of this transition and the needs of affected workers and communities. Their exclusion undermines the Board鈥檚 ability to deliver meaningful support.
鈥淲e urge the Welsh Government鈥檚 Cabinet Secretary for Economy and the Secretary of State for Wales to urgently reconsider how these local experts can be actively involved in the Board鈥檚 future work.鈥
