Steel sector gets tariff protection

Trade and Industry Minister Rob Davies. Photo: Leon Nicholas.

Trade and Industry Minister Rob Davies. Photo: Leon Nicholas.

Published Aug 28, 2015

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Johannesburg - The local steel sector is set for some relief after trade and industry minister Rob Davies approved a 10% duty.

This comes as embattled steel producers - which are closing plants and plan to retrench thousands of workers - had besieged the government to step in to resolve a crisis.

In February, ArcelorMittal SA said it had applied to the International Trade Administration Commission (Itac) for anti-dumping duties. The company had argued Chinese steel is coming into South Africa and being sold at a price below the cost of production.

In an interview at the time, ArcelorMittal chief executive Paul O’Flaherty said more than 600 000 tons of steel was imported into South Africa from China last year, which was sold at least R500 per ton cheaper than local prices.

Now Davis has stepped in, saying on Friday he had approved ITAC’s recommendation, and put a 10% tariff on steel, which previously did not attract an ad velroum charge.

The tariff also applies to zinc-coated/galvanised steel, aluminium-zinc coated steel and colour-coated steel.

In a statement, the department says his approval is based on ITAC’s recommendation following its own extensive investigation.

The investigation was initiated after an application from the South African Coil Coaters Association on behalf of ArcelorMittal South Africa and Safal Steel.

However, the approval is subject to conditions, which include no price increases on the back of the tariff, a study to investigate the tariff's effects in three-years time, and investments in the sector.

The investments include ArcelorMittal pumping in an extra amount of R250 million in its colour line and Safal investing an additional R300 million in its metal coating line in 2017.

In addition, both companies commit to not retrench any staff in these production lines over the next three years.

A range of other tariff and anti-dumping applications have been made by the steel industry to the International Trade Administration Commission of South Africa (ITAC).

IOL

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