NEASA calls for suspension of all steel duties with immediate effect

“The entire steel downstream demands this,” NEASA says.

In its latest newsletter NEASA – the National Employers Association of South Africa – has called on the government to suspend all duties imposed on steel imports with immediate effect.

“As a result of the steel downstream’s uninterrupted appeal for the scrapping of import duties protecting AMSA, the International Trade Administration Commission (ITAC) recently referred a request to have all duties suspended to the Department of Trade, Industry and Competition (DTIC),” said CEO Gerhard Papenfus.

“Contrary to product specific applications that are dealt with by ITAC, a decision involving the scrapping of these duties is a policy-matter which resorts under the sole jurisdiction of the DTIC.”

“In a recent public interest hearing, both the Southern African Institute of Steel Construction (SAISC) and the International Steel Fabricators of South Africa (ISF) stated that their initial support for the duties has changed and that they now also support the scrapping of all duties. They base their argument on the loss of market-share around the world (as a result of the duties), including many engineering-projects in sub-Saharan Africa. This resulted in the closure and downsizing of many steel fabricators.”

“The roofing and cladding industry felt the full blow of this, since the cladding that is supplied to these projects in sub-Saharan Africa is now undertaken by foreign companies and not the South African fabricators anymore.”

“One of South Africa’s most prominent role players in the steel industry, Duferco, has also joined this unanimous call for the scrapping of all duties. Duferco is also adversely affected by their loss of market-share since they are prevented, by the safeguard duties on hot-rolled coil, from supplying the South African market. Duferco, as an international trader, does not support duties. Also, if they were in a position to import hot-rolled coil free of duty, they would have been able to replace a portion of the current shortage.”

“The start-up of AMSA’s second blast-furnace will not solve the problem. AMSA has delayed orders scheduled for November 2020 until March 2021 with the increased production of the second blast-furnace already factored in.”

“Since, as a result of the duties, the steel industry was prevented from importing competitively during the time of the shortages, tremendous long-lasting damage has been done to the downstream. The DTIC’s protection of AMSA, even during this extremely dire situation, simply makes no sense. It, however, exacerbates a deeply concerning disregard for the interests of the downstream, something which severely impacts socio-economic wellbeing of, not only employers and employees in the steel industry, but South Africans as a whole.”

“A suggestion by ITAC for a rebate or refund-approach with regards to exports will have very limited benefits. Steel changes hands between South African manufacturers as the various processes add value before it is eventually exported. The exporter is often not the original importer and his product is made up of various components which are not easily identifiable.”

“In view of the extreme importance and urgency of this matter, we once again request that the DTIC scrap all duties. Delaying this will result in the sacrificing of the steel downstream, something that will, in any event, expedite AMSA’s demise.”