Davies promises support for downstream firms as he confirms steel safeguard duty

09 May 2017

Trade and Industry Minister Dr Rob Davies confirmed on Monday that he had signed off on a hot-rolled coil (HRC) safeguard duty, but refused to be drawn on the duty level proposed until the Word Trade Organisation (WTO) had been notified.

Speaking at the release of the ninth Industrial Policy Action Plan (Ipap 2017), Davies reiterated the importance of sustaining a primary steel industry, which had come under intense pressure as a result of the current global oversupply of steel.

He also insisted that government was also taking active steps to support the domestic down-stream steel sector, with some steel fabricators having expressed concern that additional protection against primary steel imports could undermine their competitiveness.

The safeguard duty had been proposed following an investigation by the International Trade Administration Commission of South Africa (Itac), which determined that there had indeed been an unexpected surge in imports of HRC into South Africa and that these cheap imports were causing injury to the domestic industry.

Once the WTO notification process had been followed, the safeguard duty would be imposed over-and-above the 10% tariff protection already in place for HRC and a range of other primary steel products.

South Africa previously had no import protection in place for primary steel products, but started to raise tariffs to the 10% bound rate allowed for under South Africa’s WTO commitments in 2015 and 2016.

Last year, AMSA and government agreed on a new pricing mechanism for flat steel, based on a steel-price basket rather than import parity pricing. In addition government agreed to designate locally made steel products and components for public-sector construction projects.

Davies stressed that some protection had also been put in place for downstream products and announced that a new Steel Industry Competitiveness Fund would be established to support companies that added value to primary steel.

Economic Development Minister Ebrahim Patel would release details of new incentives to be administered by the Industrial Development Corporation (IDC), in the coming weeks.

The new incentives would be specifically selected for their propensity to create jobs, Davies said.

Ipap 2017 also outlined plans for an accelerated roll-out of government’s Black Industrialist Programme.

Davies also made a direct link between Ipap 2017, generally, and the Black Industrialist Programme, in particular, and the call for ‘Radical Economic Transformation’.

Manufacturing Circle executive Philippa Rodseth said: “This is a great opportunity for job-rich growth, and while we await further details on funding . . . we are optimistic that this new programme will make sense to both government and to industry.

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