Plea for levy against imports of flat steel

SOUTH African producers of coated and painted flat-steel coil products, used extensively in the construction sector, have approached the government for protection against cheap and substandard imports, mainly from China and India.

They say that the cheap imports are being rerouted to SA and elsewhere in Africa as other international markets become impenetrable due to protection.

SA does not levy any import duty on these products, but most of its fellow members of the Brics bloc impose duties ranging from 2.5% to 12.5%.

Two of the biggest producers are steel giant ArcelorMittal SA and Safal Steel, which have asked the Southern African Coil Coaters Association (Sacca) to lobby the government on their behalf. Sacca has asked the International Trade Administration Commission of SA (Itac) to impose an import duty of 10% on imports of the products.

Sacca chairman Ronald Graham said local producers were also considering an anti-dumping complaint against China. "Several countries have introduced antidumping duties. Those products that were destined to go to those countries are now being rerouted to Africa and SA at extremely strange prices," Mr Graham said.
ArcelorMittal SA market intelligence manager Hannes Basson said it was possible that the local market would be affected if imported products were 10% more expensive. Many of the imported products were substandard, he said.

Francois Dubbelman, of FC Dubbelman & Associates, based in Pretoria, said companies in the steel and engineering sectors objected to the producers’ application. The companies had indicated that an input price rise, as a result of the 10% import duty, would spell disaster for an "already troubled industry".

Mr Dubbelman said the companies felt that a 10% price increase would push them over the brink. It would affect their margins and eventually lead to their closure and the shedding of jobs.

He said many companies had invested heavily to be able to beneficiate the painted coil for use as roofing, side-cladding and trusses in shopping malls, warehouses, factories and residential construction.
Itac spokesman Foster Mohale said it was premature to say who would be affected by an increase in duty since the investigation was at the initiation phase. "However, the commission does consider, among other factors, the value chain implications when assessing applications of this nature."

Sacca indicated that the current duty-free structure was untenable, given the recent increased volumes and value of low-priced imports. These were causing the domestic industry to suffer financial losses and injury in key performance indicators, according to the applicant, Mr Mohale said.

Mr Graham said imports were close to 200,000 tonnes. This was similar to the capacity of a Safal factory. The size of the South African and southern African market is close to 500,000 tonnes.

Mr Graham said the local market could easily be supplied internally by ArcelorMittal SA, Safal and Design Stainless Products. All manufacturers were experiencing overcapacity because of the imports.