Welsh Government demands urgent UK action as Port Talbot steel transition faces trade threat

The First Minister revealed she pressed the Prime Minister on the issue during a meeting last week, describing the need for UK Government action as “urgent” as the sector faces challenges including high energy costs, global overcapacity and growing trade barriers.

In a written statement published yesterday, Ms Morgan said the Welsh Government is calling for the UK Steel Strategy to be published “as a matter of utmost urgency” to provide clarity and confidence for workers and industry.

The intervention comes as Tata Steel UK’s transition to electric arc furnace steelmaking is firmly underway at Port Talbot, with the new 3.2 million tonne per annum facility due to be commissioned in late 2027 or early 2028.

Ms Morgan said EU trade measures have the potential to have “drastic consequences” for the Welsh steel sector at a time when it is already under immense trading pressure due to US tariffs and global overcapacity.

“The EU is our closest and strongest trading partner on steel, and we have been very clear with the UK Government that we urgently need to see it make a strong case for the EU to preserve our existing arrangements, especially at a time when our sector is transitioning to net zero,” the First Minister said.

The Welsh Government has also pressed the critical need for the UK to have robust steel measures to replace the UK steel safeguards, which are due to expire in June 2026.

“We have been clear that Wales and the UK cannot be left in a situation where all our major partners are implementing solutions to protect their steel sector, only to leave us open to potential dumping,” Ms Morgan said.

First Minister Eluned Morgan speaks with Tata Steel UK CEO Rajesh Nair at a recent Transition Board meeting in Port Talbot
(Image: Tata Steel UK)

She said Cabinet Secretary for Economy, Energy and Planning Rebecca Evans heard firsthand from steel unions last week about their concerns for the sector.

The Welsh Government said robust steel measures are vital to the preservation of the steel industry in Wales and the UK, especially when considering the global overcapacity of steel and increased steel tariffs driven primarily by US tariffs on the sector.

Despite the challenges, the US continues to be an important market for Welsh steel, according to the Welsh Government, which said it continues to work with the UK Government to find a solution with the US that supports the steel sector.

The Welsh Government said it understands that the recent US Supreme Court ruling has no bearing on steel and therefore the UK Government needs to agree and implement the tariff-free quota for UK steel into the US as agreed under the UK-US economic prosperity deal, whilst considering the unique transitioning needs of the Welsh steel sector.

More broadly, the Welsh Government said the sector wants to see a truly competitive electricity pricing structure, greater leverage for using UK steel through public procurement, robust trade remedies and protection against carbon leakage.

Ms Morgan said the proposed UK Government Steel Strategy is an important piece of work investigating the policy issues the domestic steel sector continues to face, as well as researching the best opportunities for capital investment.

“The Welsh Government is calling for the strategy to be afforded the absolute top priority that it deserves, and that publication is made as a matter of utmost urgency,” she said.

“Industry needs clarity, and our steel workforce needs transparency and confidence.”

The Welsh Government said it understands the UK Steel Strategy is now due to be published in March.

Tata Steel’s Morfa Coke Ovens at its Port Talbot steelworks (Image: Tata Steel)

Tim Rutter, Director of Communications and Public Affairs at Tata Steel UK, welcomed the First Minister’s statement.

“It’s encouraging to see the Welsh Government continuing to champion the needs of the steel sector at such a critical time,” Mr Rutter said.

“Their call for urgent clarity on trade measures and the UK Steel Strategy echoes what our workforce and communities need – stability, certainty and a policy framework that supports a sustainable future for steelmaking in Wales.

“We look forward to continued constructive engagement as the sector navigates this period of transition.”

Tata Steel ceased ironmaking at its Port Talbot site in October 2024 and temporarily paused steelmaking pending the construction of the electric arc furnace. During that period, the business is importing slab and hot rolled coil to support manufacturing and distribution operations at sites across Wales, England and Northern Ireland.

The company has been undergoing a restructuring that will reduce the size of its workforce to around 5,000 direct employees, who it says will supply high-quality steel products to demanding markets including construction and infrastructure, automotive, packaging and engineering.

Tata Steel UK says its ambition is to produce net-zero steel by 2045 at the latest, and to have reduced 30 per cent of its CO2 emissions by 2030.

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