South Africa's steel industry faces a fresh blow as the European Union announces plans to raise tariffs on steel imports to shield its producers from Chinese overcapacity.
The EU's proposed 50% duties on imports exceeding slashed quotas could slash access to a market worth R20.3 billion annually, leaving local mills scrambling for lifelines.
The European Commission's proposal, unveiled on October 7, aims to cap tariff-free steel imports at 18.3 million tonnes a year – a 45% cut from current levels.
Out-of-quota shipments would face doubled tariffs of 50%, targeting what officials call “unfair impacts of global overcapacity” driven by subsidised Chinese production.
"This is vital for protecting our steel sector from dumped imports while keeping markets open for fair traders," said Maroš Šefčovič, the Commission's executive vice-president for Trade and Economic Security.
The move, which replaces an expiring safeguard measure in June 2026, introduces stricter ‘Melt and Pour’ traceability rules to block circumvention via third countries.
For South Africa, whose industry is already reeling from a flood of cheap imports, the EU ranks as the second-biggest destination for iron and steel exports by value, trailing only China at R25.4 billion, Sars trade stats cited in a News24 show.
High-value products like stainless steel – a speciality for local heavyweights – stand to suffer most, as quotas tighten and tariffs bite.
South African Iron and Steel Institute secretary general, Charles Dednam, said the country exported high-value-added primary steel into the EU, and these manufacturers, especially stainless steel exporters, would be most affected.
Imports now account for a record high 37% of domestic primary steel consumption for the year to August, and the industry is pleading for urgent government action.
The EU's levies align it with US tariffs on most steel and aluminium, amplifying global market chaos that's already disrupting SA supply chains.
“The rest of the world is actually closing up… and yet we are still battling to get the tariff review out of Itac for the last how many months. It’s still not finalised, and the thing is, imports are just pouring into our country,” said Dednam.
Itac's steel tariff review was launched in March and covers over 600 codes worth R67 billion. Options on the table include hiking tariffs to WTO-bound maximums, import permits, compulsory standards and tariff-rate quotas to reduce imports.
European Commission President, Ursula von der Leyen, said a decarbonised steel sector was vital for the European Union’s competitiveness, economic security and strategic autonomy.
“Global overcapacity is damaging our industry. We need to act now. I urge the Council and Parliament to move ahead quickly.”
The proposal, WTO-compliant and backed by over 500 stakeholder responses, seeks to boost EU steel capacity utilisation to 80% amid 620 million tonnes of annual global surplus – ballooning to 721 million tonnes by 2027. It spares EEA nations and eyes flexibilities for Ukraine, but trading partners like South Africa must now negotiate country-specific quotas.
“We are dragging our feet, and we are now subject to all the surplus capacities that are in distress,” Dednam told News24.
The Commission's plan heads to the European Council and Parliament for approval, with quota decisions to follow.
