STEEL INDUSTRY: ITAC NOT IN FAVOUR OF 120% DUTIES ON LONG PRODUCTS - AT LEAST FOR NOW

by Gerhard Papenfus

During the course of 2020, AMSA applied for a 120% safeguard duty on certain long products. At the time, NEASA appointed duty experts, funded by some of our members, to oppose this application.

The input in this regard, by key industry role players including NEASA, resulted in a recommendation by ITAC that these duties should not be implemented. Government, controversially, ordered a public interest hearing despite the fact that ITAC had already recommended that the duties not be implemented.

The outcome of the hearing was that ITAC maintained its position of non-implementation of the duties. However, Government has given AMSA and other role players another two weeks to comment on ITAC’s latest recommendation.

Although ITAC’s latest recommendation is indeed positive, we remind the industry that when the safeguard-duties on hot-rolled coil were initially implemented, a similar recommendation from ITAC that such duties would ‘not be in public interest’, mysteriously morphed into ‘being in public interest’, followed by the implementation of the duties to protect AMSA.

At the time of AMSA’s initial launching of the 120%-application, the merchants stopped all imports of better quality and more cost-effective long products, fearing the possibility that material in the process of being imported, might attract this 120% duty. Since AMSA cannot supply the market and due to the shortfall not having been imported, a serious shortage followed, which landed the construction industry in a crisis. Some construction-projects have been halted, some have been delayed and some projects are now being completed by foreign-owned construction companies.

ITAC’s delay in making a final determination is entirely contra-productive. A critical consequence of any further delays in officially announcing that the duties won’t be implemented, is that merchants will not place any further import-orders unless they have a final guarantee that they will not be subjected to the risk of paying a 120% duty.

We, therefore, call on the DTIC to urgently intervene and announce the final termination of the implementation of this duty to save the construction industry from yet another several weeks’ delay.

Gerhard Papenfus is the Chief Executive of the National Employers’ Association of South Africa (NEASA)

Image of a worker next to steel rolls courtesy of The Irish Times.

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