STEEL INDUSTRY

ADDITIONAL DUTIES TO PROTECT

STEEL MONOPOLIES

Dear Steel Industry employer

Please take note that the International Trade Administration Commission (ITAC) is considering expanding their current dispensation on protectionist duties:

• To view the notice from ITAC, click here.
• Downstream manufacturers who wish to comment, must do so by no later than 12 July 2019.
• Should you wish to do so, you may forward a copy of your presentation to us at chereze@neasa.co.za

THIS CAME AS A SHOCK …

… simply because, during a recent meeting with ITAC officials, we were given an undertaking that the existing 10% ad valorem duties will be reviewed. We requested that any new proposed duties, like these, should wait until the review of the existing duties have taken place.

BACKGROUND

Prior to 2015 Government was very critical of protective duties; to such an extent that it removed the 5% duties that existed at that stage. Then, after a meeting with president Zuma and the owner of AMSA, Government made a 180 degree about-turn and started imposing duties. What happened at that meeting remains a mystery.

From

‘Not in public interest’

to

‘In public interest’

 

Prior to the introduction of some of the duties, ITAC made a finding that the proposed duties are “not in public interest”. Mysteriously, shortly thereafter, this finding was changed to being “in public interest”. Up until now this complete about-turn has not been explained.

This should have set the alarm bells ringing – but is simply ignored

NEASA will, as in the past, oppose the introduction of further duties. However, by now, we are somewhat skeptical and believe that the consultation with the downstream is mere window-dressing.

Once again the downstream and the consumer will bear the burden of keeping AMSA alive.

 

THE PRICE OF STEEL INTERNATIONALLY

 

In the meantime, global crude steel production increased by 5.4% year-on-year in May 2019. China’s output increased by 10%, India’s by 5.1%, the USA by 5.4%, Brazil by 2.9% and Egypt by 19.8%.

In a few countries’ (France, Spain, Turkey) output declined. South Africa posted the worst output decline – 10.3%. This was inter alia as a result of constant production problems at AMSA’S antiquated plant.

AMSA simply cannot sufficiently supply the market and yet the duties prohibit the downstream from accessing quality, cost effective raw material from abroad.

Kind Regards