The International Trade Administration Commission of South Africa (Itac) has made preliminary findings to increase the number of steel products subject to import controls. Products such as nails, tacks, drawing pins, corrugated nails, semifinished products of iron or nonalloy steel, bars and rods, and uncoated flat hot-rolled products of iron or nonalloy steel will be included in the import control list. This move aims to shield the downstream industry from pervasive imports.
The proposed measures will see hikes in tariffs, with many products' duties raised from 0% to their maximum World Trade Organisation (WTO) bound rates. Items such as flat-rolled products of stainless steel will attract tariffs of 10% from 0%, while screws, bolts, nuts, coach screws, screw hooks, rivets, cotters, cotter-pins, washers will see duties increase from 10% to 30%. Stoppers, caps and lids will see an increase from 5% to 20%, and nails, tacks, drawing pins, and corrugated nails to 15% from 10%.
Itac is also proposing the creation of rebate provisions for the duty-free importation of products not made in the country. The rebate provision will be extended to cases where antidumping duties had been imposed. This will help align and optimise the entire tariff structure and rebate structure to protect domestic manufacturing capacity while ensuring the availability of input material to downstream manufacturing industries.
The trade regulator launched a safeguard investigation into imports of certain cold-rolled products of iron and steel in July. This move is part of a campaign of trade protection for a domestic steel industry that has been shedding capacity and jobs for years. The domestic industry cited persistent global steel overcapacity and weakening demand as major challenges.
The influx of low-priced steel imports across the whole steel value chain, particularly from Asian markets such as China and India, has uprooted domestic producers. The domestic industry faces other big challenges such as rising input costs, including raw materials, labour, logistics, and electricity, which are eroding competitiveness.
In a separate notice, the South African Revenue Service has imposed definitive antidumping duties of 8.21%-57.84% on corrosion-resistant steel coils from China. This is after Itac found that they were being dumped into the Southern African Customs Union (Sacu) to the detriment of the local industry. The antidumping investigation was initiated after an application by local companies ArcelorMittal South Africa (Amsa) and Safal Steel.
South Africa's steel industry has been in a state of crisis due to weak demand, low levels of investment, and high input costs. The industry has lost over 220,000 jobs since 2008, with steel production declining at a rate of 2% on a compound basis. The recent measures aim to address the material injury caused by dumped imports and restore fair competition in the Sacu market.
Key points
- South Africa plans to widen import controls and impose further tariffs on steel products to shield domestic producers from pervasive imports.
- The proposed measures will see hikes in tariffs, with many products' duties raised from 0% to their maximum WTO bound rates.
- The domestic industry faces major challenges such as persistent global steel overcapacity, weakening demand, and rising input costs.
