Palladium imports drive trade boost as car industry recovers

11 June 2021, 08:04

Port of Southampton stock
Imports soar as car market reheats. Picture: PA

The UK imported more from outside the EU in April than at any point since 1997.

Imports to the UK from both in and outside the EU rose in April as palladium imports soared to meet demand from a recovering car industry.

Total imports rose by £1.4 billion, or 3.9%, during the month, according to new figures from the Office for National Statistics (ONS).

Around £600 million of this came from manufactured materials from around the world, including so-called non-ferrous metals.

The ONS said that South African palladium exporters had seen prices hit record highs during the month, as they sent the metal, a key component in catalytic converters, to car manufacturers in the UK and elsewhere.

It helped push imports of goods from non-EU countries to their highest point since records began in 1997.

However, while imports rose from both the EU and outside, exports registered a small decline.

Good exports fell by £0.1 billion, or 0.6%, over the month following two consecutive months of growth.

A rise in exports of steel and iron to the EU was not able to make up for a fall in the goods, especially cars, that the UK sent to outside the bloc.

“While April’s easing of lockdown restrictions provided a significant boost to trade, it’s not entirely a grand reopening for British exporters,” said Ana Boata, head of macroeconomic research at credit insurer Euler Hermes.

“Export businesses remain very much in the slow lane of the road to recovery, with the full glare of Brexit likely to become more visible in the coming months, exacerbating the current global disruption in supply chains, placing non-tariff pressures on bottom lines and pushing wages up in an environment of post-Covid-19 labour shortages.”

She said that changes likely mean the UK will fall out of the top 30 export growers in the world, in dollar terms.

While Euler Hermes estimates that Germany will export goods for around 320 billion dollars (£226 billion) more than it did last year, with China and the US doing more still, the UK will only export additional goods for around 16 billion dollars, putting it on par with Saudi Arabia and behind Turkey, South Africa and Vietnam.

By Press Association