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Government is working closely with all stakeholders in the steel sector to secure agreement on a comprehensive package of measures to support South Africa’s primary steel production capabilities, it said on Friday.
The domestic steel sector was struggling amid a global supply glut and cheap imports flooding the local market.
Following due process involving the International Trade Administration Commission of South Africa (Itac), Trade and Industry Minister Dr Rob Davies assented to tariff increases for three steel products. Investigations into another eight product lines have been finalised and were now awaiting government approval.
Various Organisation for Economic Cooperation and Development member countries and other developed countries have implemented similar tariff protection measures.
“It is, of course, extremely important that tariff protection measures for primary steel producers do not result in higher steel prices being ‘passed on’ to downstream, steel-intensive manufacturing sectors,” the Department of Trade and Industry said in a statement on Friday.
It believed that, as these sectors were labour intensive, any measures that could erode the competitiveness of secondary steel-intensive manufacturers, needed be avoided.
In addition to a meeting held in October 2015 with all primary steel producers, downstream manufacturers, industry associations and labour, a further meeting would be convened in the near future to finalise the package of measures proposed by government.
These measures were designed to secure the primary steel producers, safeguard downstream users and protect employment across the entire steel value chain.
Government was confident that agreement would be reached, which would be followed by an announcement setting out the package of measures to be adopted, in addition to those already implemented.
Embattled steel producer Evraz Highveld Steel and Vanadium had been in business rescue.
ArcelorMittal South Africa was reviewing the future business case of its Saldanha Works, in the Western Cape, as the steel mill’s viability had come under severe pressure owing to persistent electricity price increases.