The Portfolio Committee on Trade and Industry has raised serious concern about the exclusion of the Department of Trade and Industry (DTI) as a direct participant in the so-called ‘steel committee’ set up to monitor interventions made to shore up the domestic primary steel industry, which is under threat from cheap imports.

Committee chairperson Joanmariae Fubbs expressed frustration with both the time it had taken to establish the committee and the fact that the DTI only had observer status.

The DTI has been monitoring steel prices for years and has also been central to negotiating the trade-offs between extending greater protection for the steel industry and securing jobs and investment commitments.

It has also sought to ensure that the interests of downstream industries are protected. However, a number of steel-intensive steel-consuming sectors have expressed disquiet with the proposed domestic pricing formula, as well as the fact that local steel prices have increased sharply since the introduction of a 10% protection levy on a range of steel products.

“We expressed our disappointment that the DTI is not represented on the committee. It is our view that observer status is not desirable,” Fubbs says in a statement, noting that the portfolio committee has raised concerns about steel prices from as early as 2014.

“Therefore, the committee would like to enquire about the rationale for the exclusion of the DTI,” she adds.

A letter has been written to Ministers of Trade and Industry and Economic Development Dr Rob Davies and Ebrahim Patel respectively, requesting them to review the impact the exclusion could have on the work of the DTI and the steel committee.

It is understood that the committee had its first meeting on June 20, after the publication of a Government Gazette on June 10, which outlines the mandate of the committee and names its members.

The gazette notice is signed by Patel, who established the 14-member committee at the request of the International Trade Administration Commission of South Africa (Itac).

The Itac members are listed as Tanya van Meelis, Henk Langenhoven, Boipuso Modise, Etienne Vlok, Boikanyo Mokgatle, Grathel Motau and Ambassador Faizel Ismail.

The additional members are Johann Nel of the South African Iron and Steel Institute, Paolo Trinchero of the Southern African Institute of Steel Construction, Gerhard Papenfus of the National Employers Association of South Africa, Tafadzwa Chibanguza of the Steel and Engineering Industries Federation of Southern Africa (Seifsa) and Neels van Niekerk of International Steel Fabricators, Dean Subramanian of ArcelorMittal South Africa (AMSA) and Raghu Ram of the South African Coil Coaters Association.

The DTI’s exclusion, it has emerged, is the result of a stipulation that ‘additional members’ not outnumber Itac commissioners on a committee established under the aegis of the commission.

DTI deputy director-general Garth Strachan told Engineering News that, given the department’s exclusion as a direct member, it would seek to work closely with the Economic Development Department, which oversees Itac, to ensure the information it had at its disposal was made available to the committee.

The committee would monitor and make recommendations to Itac regarding the impact that import tariffs were having on downstream users, employment, steel pricing and the import trends in the full steel value chain.

It had been convened for a period of 12 months and would report to Itac at least twice during that period.

Strachan said he could provide no firm timeframe for the institution of a proposed new pricing formula for flat steel.

AMSA has proposed a “basket” formula, based on selling prices in a range of countries in Europe (50%), Asia (30%) and North America (20%), but excluding low-priced countries such as China, Russia and Turkey.

However, the composition of the basket is of concern to several steel-intensive companies, some of which have written to the Seifsa to request that the body set up an urgent meeting with the DTI on the matter.