Steel products producer Duferco Steel Processing has reiterated its call for the International Trade Administration Commission of South Africa (Itac) to remove the protective tariffs on hot-rolled coil (HRC), to reintroduce competition so that domestic players can recover the market share that has been lost to imports.

Speaking to Engineering News in a follow-up interview from the company’s discussion about the matter last month, Duferco marketing manager Nico van Wyk said the company had suggested that an exemption could be implemented on a quota basis, for a period of two to three years, and to be ringfenced for re-rollers only, which would be simple for Itac to implement, given that Duferco is one of only two re-rollers in the country.  

He noted that this recommendation had been proffered to Itac, but that Duferco has not yet received any feedback.

Van Wyk averred that implementing this would be the only way to bring back competition and reduce imports, emphasising that this required the support of Itac.

Duferco MD Ludovico Sanges said the latest import data from the South African Revenue Service was concerning and that Itac or the Department of Trade, Industry and Competition must take heed of this and aim to remedy the situation.

He pointed out that, after years of protection, not only was the situation not improving, but it was becoming worse.

Sanges said that the decision to protect the downstream industry had “totally failed”, given the unprecedented amount of imports in the past few years.

Van Wyk echoed this point, saying the data showed that imports were continuing to increase, and that South Africa is losing the fight against imports.

He said the only way to reduce imports was to level the playing field, by allowing re-rollers to import HRC that they could apply in the domestic market without import duties.

He explained that Itac allowed for HRC to be imported at international prices, so that companies could be competitive in the export market. “By that token, the same type of leniency should be awarded to re-rollers, who can import HRC at international prices without duties, that will make these more competitive in the domestic market, reducing our dependency on imports.”

Sanges echoed Van Wyk’s sentiments that the exemption be put in place for a short period of one to two years, to gauge the impact on the country and see if the situation improved.

Should it get worse, Sanges said, Itac could revert to the protection and even increase that. “We are, however, confident that by giving us this exemption, imports will be reduced and South African manufacturers can become more competitive,” he noted.

Duferco has also refuted claims that it is making use of subsidised material.

Van Wyk explained that the company imported from a few different countries, such as Japan, India, Brazil, Mexico and Australia, and said not all of these imports could be subsidised.