January 16, 2018

South Africa to institute protection measures for local steel industry

The Government of South Africa, through the Department of Trade and Industry (dti), is drafting a list of measures aimed at protecting the primary and secondary steel industries.

According to a report published by South Africa’s daily business newspaper, Business Day, in a brief to the Parliament Trade and Industry Committee, Garth Strachan, deputy director-general for industrial development, said: “The government is acutely aware of and concerned about the problem of high steel prices.”

Some members of parliament had expressed concerns that the steel price increases imposed by ArcelorMittalSA this year were having a devastating effect on downstream manufacturers, resulting in plant closures and job losses. The MPs felt that that the increases violated a commitment by the steel producer not to raise prices if tariff duties on cheap steel imports were raised. So far, ten tariff applications have been approved by the International Trade Administration Commission.

Business Day also reported that Economic Development Minister, Ebrahim Patel, would establish a steel committee within the International Trade Administration Commission to monitor and evaluate the performance of ArcelorMittalSA against a set of commitments regarding pricing, investments, employment, technology upgrading and production. On progress made on this initiative, Strachan said: “An executive decision on the committee and its composition is awaited and an announcement will hopefully be made shortly.” He added that the technical team was working on another concern which involved the role of steel merchants who added to the price of steel for end users without adding significant value.   Strachan said he believed this would provide relief to domestic steel producers since it would raise aggregate domestic demand for steel – volumes being very important for steel production.

He also underlined that South Africa needed to strike a balance between preserving its steel producing while protecting downstream users.

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