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 grain-oriented 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.