Llanwern steelworks hit by import surge
At Tata Steel’s Llanwern plant in south Wales, production lines that should be running full-time are now falling quiet for parts of the day, with workers put on maintenance and cleaning duties while machines sit idle. The company says there are not enough orders to keep the lines running continuously because of a surge of cheap steel from Asian countries that is threatening the viability of several UK sites and risking hundreds of jobs.
“The line has been left running half empty, and the result of that is it won’t last very long unless we can find a solution here,” said one insider.
The plant, which produces about 600,000 metric tonnes of galvanised steel annually — nearly half of UK demand — is now running at around half capacity. Andrew Gutteridge, president of the Community union and a former Llanwern worker of more than 30 years, said the changes to tariffs had reduced Llanwern’s UK market to just 25% and meant workers were having “a lot of downtime” with production lines that are not constantly running.
“At the moment everybody is coming into work,” he said. “Tata is still making massive losses so the concern from the workforce is how long can it continue.”
New tariffs, but quotas increased
The UK government introduced 50% import tariffs in July on steel imports exceeding tariff-free quotas, designed to protect against cheap steel from countries including China and India. But for some products, such as the galvanised steel made at Llanwern, the situation has worsened after the government increased the tariff-free quotas for certain countries.
India’s allowance of galvanised steel rose from 98,000 to 125,000 tonnes, Vietnam’s more than tripled from 51,000 to 174,000 tonnes, and South Korea was given an increased quota of 100,000 tonnes.
The larger quota for India is understood to have been a last-minute move to help get a trade deal with the country over the line, a move first reported by the Financial Times. World Trade Organization rules require comparable exporters to be treated equally, forcing the increases for Vietnam and South Korea.
Russell Codling, commercial director at Tata Steel, said the company’s Zodiac galvanizing line at Llanwern is already being significantly affected by the new quotas and that the current situation is not sustainable.
Union calls for stronger action
Gutteridge said it was heartbreaking to see imported galvanised steel from Vietnam arriving at Newport Docks when the plant is just 10 minutes away. He suggested a reduction in EU quota access, which he said was placing additional pressure on the UK’s steel operations.
The UK government’s steel strategy, announced in June, aimed to boost domestic steel. Gutteridge said most of it is “absolutely fantastic” but added that the government “needs to step up and do something” to tackle the rise in cheap imports.
“Unfortunately I’m picking up that it could be 12 months before this is reviewed,” he added. “This issue needs to be sorted and it needs to be sorted now.”
The Community union has called on the government to take stronger measures to safeguard Llanwern, highlighting the site’s role in supplying galvanised steel to the automotive and construction industries. Alasdair McDiarmid, assistant general secretary at Community, said the increase in duty-free steel imports from China and Vietnam poses a threat to the domestic steel industry.
Concerns over Port Talbot transition
Tata Steel is investing £1.25 billion, including a government grant of approximately £500 million, in a three million metric tonne electric arc furnace at Port Talbot, replacing its old blast furnaces. The move, which reduced 2,000 jobs in the region when the blast furnace was closed in 2024, is seen as key to the company’s decarbonisation plans.
But concerns have been raised that prolonged pressure on Tata’s downstream operations could affect the transition. A steel industry source warned that prolonged tariff pressure could endanger the switch to the electric arc furnace. Gutteridge said the tariff issue could have implications for other parts of the UK steel industry, such as the electric steel-making furnace in Port Talbot.
Tata Steel said plans for the electric arc furnace could be delayed for up to eight months due to an electrical issue. The company is understood to have met Blair McDougall, the minister for industry, two weeks ago.
Earlier this summer, Tata UK boss Rajesh Nair said he was “very concerned” about the new arrangement.
Government defends measures
A government spokesperson said the steel measure aims to strike the right balance between protecting domestic production and maintaining a secure supply. They said final quotas were shaped by extensive engagement with industry, and that the government will continue to take industry feedback into account, monitor the impact closely and review the measure after 12 months.
The government has previously said it will review the quota system before it changes again in July 2027.