Data: SHFE, DCE market movement (May 18)

[SMM Steel] The British Chambers of Commerce (BCC) warned that proposed UK steel quota reductions and higher above-quota tariffs could add millions of pounds in costs for downstream industries including construction, engineering, and manufacturing. The BCC said the planned 50% above-quota tariff and tighter quotas risk disrupting supply chains, reducing competitiveness, and forcing companies to shift sourcing toward cheaper overseas suppliers. The group also warned that manufacturers relying on imported specialty steel grades unavailable domestically could face production disruptions. The BCC urged the UK government to phase in tariff increases, extend transition measures from 3 months to at least 12 months, and accelerate a UK-EU steel trade agreement.

[SMM Steel] The European Commission launched a consultation on May 13 regarding draft CBAM rules that could allow EU importers to receive discounts on CBAM certificate costs if imported goods have already been subject to carbon pricing outside the EU. The proposal distinguishes between domestic and international carbon credits, with international credits limited to 10% of declared emissions and required to comply with Article 6 of the Paris Agreement. Currently, only Japan, South Korea, and Vietnam allow international credits within their carbon markets, according to ICAP. The consultation period will run until June 10.

[SMM Steel] SEAISI expects ASEAN steel demand to continue improving in 2026, with apparent steel consumption forecast to reach 87.9 million tonnes, up 2.6% YoY and 8.2% higher than 2024 levels. ASEAN steel imports remained high at around 50 million tonnes in 2025, while import penetration stayed above 60%, continuing to pressure local producers. Vietnam remained the region’s strongest growth market, with steel demand rising over 21% in 2024. SEAISI also warned that the Iran conflict could create energy-related risks for ASEAN steel markets, as the region remains heavily dependent on Middle Eastern energy supplies. Meanwhile, ASEAN steel exports are expected to remain elevated at around 22 million tonnes in 2025, supported by Indonesia’s expanding HRC capacity.