South African steel companies need to continue to look for new markets, particularly in Africa, following the recent setback in which the US government decided not to grant South Africa an exemption on steel and aluminum tariffs, says Economic Development Minister Ebrahim Patel.
“We will need to engage with the US administration to point out that we are not a major disruptor of US steel. At the same time, South Africa should learn from this that diversification is an important hedge against trade interventions,” Patel told Engineering News Online.
He said there were significant opportunities to export to African countries.
“Africa’s biggest deficit at the moment is infrastructure. The continent has enormous natural resources, a large and growing population and young people with energy and enterprise. But Africa needs energy, transport, water and ICT. All of these require steel.”
He said while there was a global glut of steel, there were opportunities for innovative thinking and fresh approaches in Africa.
The US is imposing a 25% ad valorem tariff on steel imports and a 10% ad valorem tariff on aluminium product imports.
“It’s never good news for South Africa when foreign markets are closed to us, particularly on unfair grounds. We are a small market for the US in relative terms.
"It’s really been closed to us because we have been successful, because we run efficient operations. We are able to produce steel that the market needs, so in one way it's a back-handed compliment. It indicates that we are getting some things right,” said Patel.
Patel said locally based companies also had the opportunity to replace manufactured steel products with products made in South Africa. He referred to steel products that are being made from scrap at the recently opened Cape Town Iron and Steel Works (Cisco) plant.
Cisco has exported reinforced steel bars to the US, East Africa and Indian Ocean islands over the past few months. Turkish owners have invested R550-million in Cisco since acquiring the company in 2012, and have created 300 direct jobs and 120 indirect jobs.
“We can take opportunities where we have been edged out of our domestic market by imports here and begin to replace that with products made in South Africa. We are open for business. We are open for foreign investors but we are also looking to South African know-how and ingenuity and capital to help us achieve the National Development Goals,” Patel said in an interview.
“With a ‘can-do’ attitude and mindset and a new partnership that President Ramaphosa is talking about, we can get South Africa working again.”