AMSA vs the Steel Downstream: Application for the introduction of 120% safeguard duties on long products (setting the record straight)

STEEL INDUSTRY ALERT

AMSA vs the Steel Downstream

APPLICATION FOR A

120%

SAFEGUARD DUTY

Dear Steel Industry employer

On 30 June 2020, NEASA published a notice (click here to view) regarding AMSA’s application to the International Trade Administration Commission (ITAC) for a 120% safeguard duty on certain long products.

In an article, published in Engineering News on 2 July 2020, AMSA responded by stating that NEASA’s statement was “inaccurate and misleading”. AMSA then continued to state that their application to ITAC “does not propose any level for the safeguard duty and that ITAC will decide whether to grant a safeguard and at what level”

This, however, is simply not true. The following is an extract from AMSA’s application that was published by ITAC on 5 March 2020: “This calculates to a price required by ArcelorMittal of RX per ton [Confidential. This information would be of significant competitive advantage to the Applicants’ competitors and is not susceptible to summarization] in order to achieve an EBITDA of 10%, and a safeguard duty of around 120%.”

In reaction to NEASA’s previous alert, a steel manufacturer made the following comment: “AMSA is acting like someone who starts a bus-company but installs only one seat per bus. With a sense of entitlement, they then run to government and ask them to make a law to force people to pay such an exorbitant price for the ticket that the bus-company should make 10% profit.”

If this blatant disregard for the interests of the  manufacturing and construction industry is not enough, AMSA also:

• applied to re-introduce safeguard duties on hot-rolled coil, which will impact directly on all flat products utilised by the Steel Industry; and
• they have also applied for duties to be imposed on nine new tariff codes for coated products which they admittedly don’t produce.

AMSA’s statement that these protectionist duties are “… in place to protect the entire South African steel industry …” flies in the face of previous- and a recent survey by NEASA, that 95% of the steel companies in South Africa are in favour of scrapping all duties.

It simply can’t be denied that if the Steel Industry doesn’t have access to high quality, cost-effective raw material for its production processes, it will not be competitive. Anti-competitiveness is the sole cause of the Steel Industry’s constant decline.

Regards

NEASA 24/7 NATIONAL HOTLINE: 086 016 3272

legalhotline@neasa.co.za
(please have your membership number at hand)

We are all in this together.

Privileged and challenged to be South African.