Trade union Solidarity on Tuesday raised an alarm about the potential collapse of South Africa’s already-strained steel industry as cheap imports and “unfair trade practices” threaten the sustainability of local steel producers.
Presenting its views to the International Trade Administration Commission (Itac), the trade union said it firmly believed that subsidised Chinese steel imports in particular were hurting the South African industry, with more risks of plants shutting down and thousands of jobs being lost.
“Chinese steel is subsidised in China, with the result that steel is dumped on a large scale in South Africa, which places immense pressure on our steel producers because the playing field is not level,” explained Solidarity metals and engineering deputy general secretary Marius Croucamp.
With the steel industry allegedly subjected to these “unfair trade practices”, Solidarity appealed to Itac for urgent intervention.
“It is crucial that preventative measures should be set in place now to limit the dumping of Chinese steel in South Africa,” he commented.
Itac had already, late last year, imposed a 10% import duty across ten primary steel categories, including hot-rolled coil (HRC).
At the time, the commission conceded that the steel industry in the Southern African Customs Union (Sacu) was “suffering serious injury”, as a result of a surge in imports of HRC, but was awaiting feedback from stakeholders to determine whether it would be in the public interest to impose definitive safeguard measures.
Earlier this month, Itac initiated a safeguard investigation on certain cold-rolled-steel products to establish whether the rise in imports into Sacu had caused “serious injury”, such as a decline in sales volumes, output, market share, productivity, capacity use and employment.
ArcelorMittal South Africa also applied to Itac for the approval of safeguard duties covering HRC, cold-rolled coil, colour and galvanised steel, rebar and wire rod.
This followed the European Commission stepping up its “trade defence” to regain a level playing field in an industry facing global oversupply.
Earlier this month, the European Commission imposed definitive five-year antidumping duties on cold-rolled steel from China and Russia, with duties ranging from 19.7% to 22.1% for Chinese importers and from 18.7% to 36.1% for Russian companies.
“The EU currently has over 100 trade defence measures in place, 37 of them targeting unfair imports of steel products, 15 of which are from China. Twelve more investigations concerning steel products are still ongoing,” the commission noted in a statement at the time.
Newswire Reuters has reported that, despite the measures, imports continue to surge.
During the year to May, carbon steel imports jumped 21%, with China accounting for 27% of total imports, while stainless steel imports increased 17%.
The commission is scheduled to rule on preliminary antidumping duties on plate and HRC from China in November.