STEEL INDUSTRY: BREAKING NEWS: IMPORT DUTIES TO PROTECT THE MONOPOLISTIC AMSA ELIMINATES AMSA'S COMPETITOR

STEEL INDUSTRY

IMPORT DUTIES TO PROTECT THE MONOPOLISTIC AMSA
ELIMINATES AMSA’s COMPETITOR

Duferco, who supplies coated products to the South African market in competition with AMSA, has notified the steel industry that, as of 2021, they will no longer be able to supply the domestic market. (Click here to read the announcement).

This devastating news is as a result of Duferco not having access to competitively priced raw material sourced locally (a polite way of saying AMSA cannot supply the local market at all sufficiently) or not being able to import, due to the hefty premium to be paid (referring to the import duties protecting the monopolistic AMSA).

The custom- and safeguard duties to protect AMSA were, inter alia, granted on the condition that AMSA would supply Duferco with hot rolled coil at a competitive price. AMSA initially complied with this arrangement, but this contract recently expired and, in spite of the safeguard duties that were extended, AMSA refused to extend their contract with Duferco.

AMSA (enjoying the benefit of the duties) consequently increased their prices to such a level that Duferco simply could no longer compete with AMSA in the local market. This action, in our view, constitutes uncompetitive behaviour – AMSA simply eliminated its competitor. Therefore, NEASA will immediately lodge a complaint at the Competition Commission.

This conduct by AMSA is so blatant that Government simply can no longer refuse the calls to:

• desist from introducing any further duties; and
• scrap all existing duties with immediate effect.

Should Government not heed this call from the downstream, it will be a clear indication that Government has indeed turned its back on the downstream and that it intends to protect AMSA’s monopolistic interests, regardless of the costs to downstream businesses and the economy.

Regards

We are all in this together.
Privileged and challenged to be South African.