COULD SA HIKE STEEL TARIFFS AGAIN?
ArcelorMittal SA (Amsa) has applied to the department of trade & industry (DTI) for safeguard duties of an additional 30% on hot- and cold-rolled steel. This comes after the department approved a 10% hike in tariffs on 10 primary steel products last year, to preserve SA’s steel- producing capacity against cheap Chinese imports.
WHAT ELSE COULD GOVERNMENT DO?
International steel prices have slumped, affecting the industry. The DTI could designate locally made steel for state infrastructure projects, which, in theory, would benefit all producers. This would be the final step in a package of trade-offs negotiated between government and Amsa.
WHAT DOES IT MEAN FOR AMSA-GOVERNMENT RELATIONS?
Amsa was slapped with a R1.5bn fine for anti-competitive behaviour conducted between 2003 and 2008, ending a long battle between the two. It has also agreed to drop import parity pricing and adopt a new pricing model for flat steel products.
WHAT ARE THE NEGATIVE CONSEQUENCES?
Downstream manufacturers, under the banner of the National Employers Association of SA, say all tariffs should be scrapped. Allowing cheap steel into the country will foster the industry, the association says. But if government implements the 30% hike, it believes businesses would be forced to shut down.
FM Research, Neasa