Injury & Protection

5th August 2016 By: Terence Creamer - Creamer Media Editor

Injury & Protection

Much-anticipated moves to increase protection for both the primary and downstream steel sectors are advancing, with a safeguard investigation into hot-rolled coil (HRC) imports completed and a review initiated on whether protection should be increased across a range of downstream products.

The International Trade Administration Commission of South Africa (Itac) has concluded that the domestic steel industry is “suffering serious injury” as a result of a surge in HRC imports. However, it has decided not to impose provisional measures until it has received comments on whether further protection is in the public interest.

Itac initiated the HRC investigation on March 24 following an application from ArcelorMittal South Africa (AMSA), which has already succeeded in ensuring the imposition of import duties of 10% across ten primary steel categories, including HRC.

In the July 22 Government Gazette, Itac reported that its investigation found that HRC imports had surged as a result of “unforeseen developments” and that there was a “causal link between the serious injury suffered by the Southern African Customs Union (Sacu) industry” and the rise in imports.

However, it held back on the imposition of provisional safeguard duties pending comments from stakeholders as to “whether it will be in the public interest to impose definitive safeguard measures”.

Interested parties have been given two weeks from the publication of the report to comment in writing on the commission’s preliminary determination and a public hearing has been scheduled for August 30.

AMSA said in a recent trading update that it had submitted five safeguard duty applications for Itac approval covering HRC, cold-rolled coil, colour, galvanised and rebar and wire rod.

The JSE-listed group argued that the local steel industry remained threatened by imports, primarily from China, and that safeguard duties were necessary to ensure the viability of the company and the domestic steel industry.

However, there are also several opponents to the imposition of further protection, which critics assert will further undermine the competitiveness of the already embattled downstream steel sector.

Separately, however, Itac has initiated a review of the general rate of customs duty on various downstream steel products that appear under 16 different tariff headings.

The products covered by the review range from wire, rope and cables to cooking appliances and prefabricated buildings. In a number of categories, duties already apply, but there are also several downstream product categories where no duties apply.

Itac says the review has been initiated because the global steel crisis is negatively impacting on the entire Sacu steel value chain, which has led to a number of downstream industries expressing concern regarding the lack of tariff protection against imports of finished products.

It notes, too, that a competitive steel value chain that supports increased beneficiation, investment and employment is a key priority for Sacu development.

Itac has given four weeks, from July 22, for stakeholders to make written representations on the issue.