DUTY CALLS

Iron and steel

safeguard

In the Government Gazette of

24 March the International

Trade Administration

Commission of South Africa

(Itac) announced the initiation

of an investigation into

remedial action in the form

of a safeguard against the

increased imports of certain

flat rolled products of iron,

non-alloy steel or other alloy

steel (not including stainless

steel), whether or not in

coils (including products

cut-to-length and ‘narrow

strip’), not further worked

than hot-rolled (hot-rolled

flat), not clad, plated or

coated, excluding grainoriented

silicon electrical

steel, classifiable under

tariff subheadings 7208.10,

7208.25, 7208.26, 7208.27,

7208.36, 7208.37, 7208.38,

7208.39, 7208.40, 7208.51,

7208.52, 7208.53, 7208.54,

7208.90, 7211.14, 7211.19,

7225.30 7225.40, 7225.99,

7226.91 and 7226.99.

The application was lodged

by South African Iron &

Steel Institute (SAISI), an

industry body, on behalf of its

members.

The period of investigation

for data evaluation for the

purposes of determining

the allegation of serious

injury is 01 January 2012

to 31 December 2014 plus

an additional seven months’

information for 2012 to 2015

(01 January to 31 July).

The injury analysis relates

to information submitted by

ArcelorMittal South Africa

Limited (AMSA), a member of

SAISI, with a collective output

of like or directly competitive

products constituting a major

proportion (approximately

more than 70%) of the total

domestic production of those

products.

According to the notice,

SAISI submitted that a

confluence of events formed

the basis of the unforeseen

development that supported

this application. That is,

ultimately the considerable

oversupply of steel, and

specifically the subject

products, in the world today

causing a surge in the volumes

of imports into the Southern

African Customs Union

(Sacu).

SAISI contends, amongst

other things, that during

the Uruguay Round of

negotiations, South Africa

did not foresee the following

events: (i) The unprecedented

steep rate of increase in steel

production capacity over the

ensuing two decades; (ii) The

significant market downturns

in emerging economies and

the resultant contraction of

demand for steel; (iii) Record

export volumes by countries

with excess capacity, fuelled

by excess steel supply; (iv)

Given the global nature of the

steel industry, excess capacity

in one region can potentially

displace production in

other regions, thus harming

producers in those markets;

(v) Recent trade measures by

those countries are a result

of all of the above-named

unforeseen developments, and

the fact that their markets

are now protected contracts

the global demand for steel

even further, exacerbating

the problem of increased

imports into the Sacu; (vi)

The oversupply of steel has

led to a deterioration in

the financial situation of

steelmakers globally and also

the Sacu. The excess capacity

is considered as one of the

main challenges facing the

global steel sector today; and

(vii) Despite slowing demand,

growth and the existing excess

capacity, there are several new

investment projects under

way and planned, expected

to lead to further increases of

imports.

Comment is due by

13 April 2016.