SA govt moves to protect domestic steel industry with 10% duty
South Africa has instituted rates on five categories of steel wire rod and steel reinforcing bar, increasing protection for an industry battered by slower demand and dumping from China.
Effective December 18, certain steel products would attract a 10% duty.
This was the second of the 11 tariff applications that ArcelorMittal South Africa (AMSA) has applied for to the International Trade Administration Commission of South Africa (Itac). AMSA has asked Itac to assess the case for raising duties to the 10% bound levels allowed for under South Africa’s World Trade Organisation commitments.
AMSA has argued noisily for increased protection on the basis that it is unable to compete with cheap, “subsidised” steel imports from China. It estimates that imports made up to 30% of domestic consumption during the first half of 2015.
Trade and Industry Minister Dr Rob Davies has previously stated that government would back greater protection for the industry, which was facing intense import competition as a result of the current global steel glut.
However, government would insist that such protection not form the basis for an immediate 10% rise in domestic steel prices. Instead, the protection should create room for the local industry to win back market share from imports.
Engineering News recently reported that South Africa’s stainless steel consumption, which has recovered from the slump experienced during the 2009 recession, is expected to track sideways in 2016.
Apparent consumption in 2015 rose 1.9% year-on-year to 190 000 t, which is below the post-crisis peak of nearly 210 000 t, but still marginally better than pre-crisis peak levels.
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