JOHANNESBURG - The Steel and Engineering Industries Federation of Southern Africa (Seifsa) said on Monday that it was "extremely concerned" that the United States's investigations into carbon and alloy steel wire rod imports will worsen local industry woes.
This comes as the US Department of Commerce and the US International Trade Commissions (ITC) have begun parallel investigations to determine if American producers have been harmed by carbon and alloy steel wire rod imports from Italy, the Republic of Korea, South Africa, Spain, Turkey, Ukraine and/or the United Kingdom.
The Department of Commerce's preliminary determinations indicate that producers/exporters in the seven countries have sold carbon and alloy wire rod in the United States at less than fair value.
Foreign companies that price their products in the US market below the cost of production or below prices in their home markets are subject to anti-dumping duties.
Seifsa's chief economist, Michael Ade, said in a statement that affirmative determinations, coupled with the ITC final injury determinations, would result in the commerce department issuing anti-dumping orders and imposing relevant duties, thus increasing local steel producers' exporting costs, and eventually squeeze their profit margins.
"Specifically, investigation of South Africa found that exporters dumped wire rod in the US at margins of 142.26 percent based on adverse facts available. All other producers/exporters in South Africa were assigned a rate of 135.46 percent," Ade said.
Seifsa represents 25 independent employer associations in South Africa.
Ade said Seifsa believed that the investigation by the US was a "tit-for-tat" retaliation for South African domestic steel industry successfully pushing for import tariffs and safeguard duties from cheap international imports.
He said this highlighted the long-term demerits of inward-looking protectionist trade policies.
Ade said the US inquiry appeared to be only the tip of the iceberg, and could be extended to other domestic steel products, potentially resulting in many overseas trading partners retaliating and protecting their steel industries.
"This is of grave concern to Seifsa, given the strategic importance of the local steel industry. The need for unity, including support for a sector-related government policy stance from all stakeholders across the value chain of the local steel industry, is imperative," Ade said.
The US Department of Commerce is scheduled to announce its final anti-dumping determinations on 9 January 2018.