Patel confirms 10% protection for two more steel products

Economic Development Minister Ebrahim Patel announced on Thursday that the International Trade Administration Commission of South Africa (Itac) had recommended the imposition of a tariff duty of 10% on two additional steel products – hot rolled coil (HRC) and certain steel bars and rods.

“The recommendation is now being processed within government,” the Minister said during his Budget Vote address to lawmakers.

Steel producer ArcelorMittal South Africa (AMSA) had approached Itac for protection on HRC and steel bars and rods having already secured 10% protection on eight other steel products during the course of 2015 and early 2016.

Protection was granted on galvanised and colour-coated steel in December, and in February, Itac Gazetted notice of 10% protection on bar and wire rod, as well as plate, cold-rolled coil, sections, and semi-finished products such as slabs, blooms and billets.

However, AMSA was particularly keen to secure protection on HRC, noting that the bulk of the 103 000 t of steel imports in February had been in the form of HRC.

The company was, separately, pursuing five safeguard-duty applications, which, if successful, would impose far higher protection levels over and above the 10% duties already secured. Itac was expected to make a determination on these applications in June.

Patel said the steel industry had been through a particularly difficult time, owing to the large surplus of steel globally.

“This has resulted in fierce price-cutting and pressure on steel plants to close. In South Africa, we felt the effect of these global storms through a surge of imports. We consulted both primary steel makers and their customers to determine the best way forward,” he said.

However, he stressed that protection had been introduced with caveates “in order to stop this facility from being abused”

Itac, he said, would be putting measures in place to track prices in the industry and would review the tariffs annually.

“The clear understanding between the main steelmaker and government is that they will invest at least R4.6-billion to improve their plant competitiveness, will not close any steel plants and will not cut jobs beyond what had previously been announced.”

AMSA had already announced a series of price increases on both flat- and long-steel products since the start of the year, with average prices set to rise by 10% again from May 1.

However, the company insisted that the increases had nothing to do with recent moves to raise import barriers and were, instead, the result of a recovery in international prices and a rise in raw material input costs.