Import and anti-dumping duties imposed by Brics and other countries have increasingly seen Africa’s emerging trading partners upping their duty-free exports to South Africa. The latest industry to fall victim to this is the coated and flat steel coil producers such as Safal Steel and ArcelorMittal South Africa. The Southern Africa Coil Coaters Association (Sacca) has requested an investigation into the import – mainly from China and India – of coated and flat steel coil products to determine whether import duties should be imposed to protect local production. Sacca chairman, Ronald Graham, told FTW an increasing number of countries, including African countries, had introduced import, and even some antidumping, duties to protect their local industries. “That means countries such as China need to find new markets for their product, and a lot of it is finding its way to South Africa.” Graham said that the southern African producers exceeded an annual production of 500 000 tonnes, and by June this year over 300 000 tonnes had already been imported. “That means there will probably be an over-capacity of 500 tonnes by the end of this year,” he said. Last year, the total of imported product was 300 000 tonnes. “The local plants are designed to produce at capacity, or near-capacity. The import of product at strange prices makes it difficult to sell the local capacity and therefore significantly affects the efficiency of the operation,” said Graham. He added that this of course resulted in large-scale downsizing. Foster Mohale, manager of communications at the International Trade Administration Commission of South Africa (Itac), confirmed that a preliminary investigation was launched last month. He said it was still at the initiation stage and might take a minimum of six months to complete. “On completion of the preliminary phase, Itac will determine whether it needs to launch a formal gazetted investigation.” Mohale told FTW that the 5% duties on the products were reduced to ‘free of duty’ upon recommendation by Itac on July 5, 2005. “At that time the commission found that the primary steel industry was performing well and that the recommended reduction in duties could assist in lowering the cost of production for downstream industries,” Mohale pointed out. Henk Langenhoven, chief economist for the Steel and Engineering Industries Federation of South Africa (Seifsa), agreed that if import duties were imposed it would increase costs. “But it may be more costly to the country as a whole if we lose the production capacity that we have due to price-undercutting and/or dumping,” he said. “Cheaper sub-standard product will not benefit the construction and steel industry in the medium- to long-term.” CAPTION Imports of the flat steel coil product, produced locally by Safal Steel and ArcelorMittal South Africa amongst others, may soon face import duties into South Africa. Photo: ArcelorMittal
