SAISC urges stakeholders to raise steel shortage concerns amid Itac import rebate investigation

10th February 2021 By: Marleny Arnoldi - Creamer Media Online Writer

The International Trade Administration Commission (Itac) has reportedly received a policy directive from Trade, Industry and Competition Minister Ebrahim Patel to investigate the creation of a rebate facility of customs and safeguard duties to cover imported flat steel products used by the downstream steel industry.

The Southern African Institute of Steel Construction (SAISC) says receiving this notification is good news, since the downstream sector has been complaining about shortages of steel.

The institute has requested assistance with Itac’s investigation and urges stakeholders to submit information around specific products affected by the backlog from steel producer ArcelorMittal South Africa (AMSA), the backlog as experienced by the company and the impact it has on a company’s operations.

Submissions should be sent to Lufuno Maliaga and Diphatogo Rathete at lmaliaga@itac.org.za or drathete@itac.org.za by February 19.

Certain short-term factors, such as lockdown-affected construction projects, which were rapidly being completed once the lockdown eased, resulted in steel demand increasing at a rate quicker than originally anticipated.

AMSA late in January reported that it would increase output at its Vaal Meltshop electric arc furnace, in Vereeniging, to help address prevailing steel shortages, which have been negatively affecting downstream fabricators and manufacturers for several months.

In December, AMSA also restarted Blast Furnace C at the Vanderbijlpark Works in an effort to respond to the prevailing steel shortages, which had led several downstream consumers to call for the lifting of import duties on steel.

Flat and long steel imports into South Africa are subject to base tariff protection of 10%, but certain flat products are also subject to safeguard duties of a further 8%, resulting in overall protection of 18% on certain grades.

Umeesha Naidoo, of the Department of Trade, Industry and Competition, earlier in January stated that flat steel and heavy long steel products were heavily affected by shortages, but that it was a global problem arising from lockdowns.

He added that the problem in South Africa had been exacerbated, though, by the closure of AMSA’s Saldanha Steel plant, as well as the steel producer’s delays in getting its Blast Furnace C restarted.

AMSA has been disapproving of a rebate against duties, despite its inability to supply steel on a reliable and regular basis, said Unique Ventilation and Support Systems director Ollie Olevano told Engineering News in January.

While rebates can be considered for steel not available in the domestic market, consumers have nevertheless struggled to secure these during the recent period of shortage.