The Steel Strategy matters to UK ATFs because it could strengthen long-term domestic demand for ferrous scrap by backing UK steelmaking and tightening import controls. But recyclers will be watching to see whether ministers now follow through on energy costs, carbon border rules, and procurement reforms that will determine how much practical benefit reaches the market.

UK Steel and Community have welcomed the Government’s new Steel Strategy, describing it as a major step towards securing a more competitive and resilient domestic steel sector.
For UK ATFs and vehicle recyclers, the strategy matters because it signals a stronger focus on domestic industrial capacity, steel supply chains, and the long-term role of scrap in UK manufacturing. While the package is aimed at steelmakers, it has wider implications for recyclers supplying ferrous material into the market.
Tougher trade measures at the centre of the strategy
The Government has set a higher ambition for the UK to produce up to 50% of the steel it uses, up from around 30% today, and has announced tougher action on imports.
Imported steel quotas are due to be cut by 60% from current arrangements from July, with any steel brought in above those levels facing a new 50% tariff. The Government is also considering a transitional approach so the tariff would not apply to goods under contracts agreed before 14 March and imported between July and September.
UK Steel said the quota cuts go further than similar measures in the US, Canada and the EU, and show the Government recognises the damage caused by global overcapacity and subsidy.
According to the industry body, domestic steelmakers have seen their share of UK demand fall to just 30% as imported steel has undercut local production. UK Steel said the Government now accepts that the UK cannot afford to be overly dependent on imports for strategically important uses such as defence, grid infrastructure and civil nuclear.
The organisation also welcomed expanded trade defence support for bright bar, non-alloy wire and stainless steel producers.
What this means for UK recyclers
For ATFs and vehicle recyclers, there is no immediate operational change, but the strategy is still significant.
A more protected and better-supported UK steel sector could help reinforce domestic demand for ferrous scrap over time, particularly as electric arc furnace capacity grows. At the same time, tighter import controls could increase costs for some downstream users, with wider knock-on effects across manufacturing and construction.
The key point for recyclers is that Government is placing greater strategic weight on UK steelmaking, industrial resilience and domestic supply chains. That strengthens the wider case for recovered metals as part of UK industrial policy.
Procurement and energy still in focus
The Government has also refined the Public Procurement Notice for steel, with industry continuing to work with ministers on further improvements. This is intended to strengthen the use of UK steel in public projects.
However, UK Steel says one of the sector’s biggest challenges remains unresolved: energy prices.
The industry body said UK steelmakers still face industrial electricity prices 14% higher than in Germany and 25% higher than in France. While the Government has increased compensation for electricity network charges, the Steel Strategy does not include new measures to reduce wholesale power costs.
That matters as steelmaking becomes more electrified. Business Secretary Peter Kyle announced the package in Port Talbot, where Tata is building an electric arc furnace that will make steel by melting scrap metal.
Concerns over UK CBAM
UK Steel also warned that the UK Carbon Border Adjustment Mechanism (CBAM), in its current form, risks making imported Chinese steel cheaper than lower-emission steel produced in the UK.
It said the policy covers too narrow a range of products, meaning importers could avoid the UK CBAM by switching to finished or semi-finished steel-containing goods outside its scope. It also warned that added carbon costs could leave UK producers less competitive in non-EU export markets if no export solution is introduced.
Industry reaction
Gareth Stace, Director General, UK Steel, said:
“We welcome the Government’s Steel Strategy as a vital step towards securing a competitive, resilient future for one of the UK’s most strategically important industries.
“This is a significant moment, and Government ministers deserve recognition for their leadership today.
The Government’s bravery in taking the required measures represents a real shift in the culture of Westminster from protecting the ideology of free trade at any cost, to defending critical industries and national security.”
Community Union General Secretary Roy Rickhuss CBE said:
“Since taking office in 2024, the Government has taken many decisive steps to support the steel industry and those who work within it. This Steel Strategy represents the culmination of these efforts.”
Peter Brennan, Director, Trade & Economics Policy, UK Steel, said:
“These trade measures represent a tremendous commitment from a government that totally understands the landscape of the global steel industry and is ready to do what is needed to revitalise our industry.”
Frank Aaskov, Director, Energy and Climate Change Policy, UK Steel, added:
“Despite this Government’s progress on shielding steelmakers from network costs in electricity bills, the strategy fails to address the need for action on wholesale power prices.”
In response to the release of the UK Steel Strategy, the British Metals Recycling Association (BMRA) said:
BMRA welcomes the publication of the UK Steel Strategy, which rightly recognises the critical role of recycled metal ‘scrap’ in delivering a resilient and sustainable steel sector. We look forward to engaging constructively in the Government’s proposed Scrap Working Group. To ensure balanced and effective discussions, it will be essential that the Group includes a diverse representation of metal recyclers as well as metal manufacturers.
We also welcome the measures aimed at safeguarding and strengthening the competitiveness of UK steelmaking. UK steel producers form a vital domestic customer base for metal recyclers, and the planned expansion of Electric Arc Furnace (EAF) capacity will significantly deepen this relationship. Growing domestic demand for high‑quality recycled feedstock will support a more circular, lower‑carbon steel industry.
What to watch next
For UK vehicle recyclers, the strategy is another sign that steel, scrap and domestic processing capacity are rising up the political agenda.
The package will now be judged on whether ministers follow through on the unresolved issues identified by industry: competitive energy prices, workable carbon border rules and procurement policies that genuinely support UK production. For recyclers, those decisions could shape future demand for recovered steel and the wider commercial outlook for ferrous material.
Sources www.bbc.co.uk www.uksteel.org
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