ITAC seeks input on steel duties after HRC probe finds imports causing "serious injury"

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 imports of hot-rolled coil (HRC).

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 for the imposition of provisional safeguard duties until receiving 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.

DOWNSTREAM TARIFF REVIEW

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 the entire Sacu steel value chain, which has lead a number of downstream industries to express 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.

The safeguard investigations, together with the review of downstream steel tariffs, arise against a backdrop of increasing efforts to tackle oversupply globally.

G20 Finance Ministers, who met in China recently, indicated that excess capacity in steel and other industries required a collective response. A steel forum would be held in September to discuss the feasibility of forming a global forum on overcapacity.