STEEL INDUSTRY: TROUBLED BLAST-FURNACES: AMSA UNABLE TO SUPPLY

STEEL INDUSTRY

TROUBLED BLAST-FURNACES

AMSA UNABLE TO SUPPLY

by Gerhard Papenfus

On 8 January 2021, AMSA stated that “with all three blast-furnaces fully operational” they will be able to supply the South African market and beyond.

However, during the course of the week of 18 January, one blast-furnace ceased production (as a result of a fire), a second one is unstable (being “erratic” and with reduced production) and the third one is not being operated at full capacity.

The Newcastle blast-furnace, which is supposed to, inter alia, feed the Highveld Mill that produces products on which AMSA has applied for a 120% safeguard-duty, is not producing at all. In a public hearing regarding this application (affecting certain long products), there was a unanimous call to Government that all duties must be scrapped. The government has simply ignored this presentation.

Adding to the above, blast-furnace D at Vanderbijlpark is unstable and blast-furnace C is not being operated at full capacity. These two furnaces produce flat products, in respect of which AMSA now has full market control; that is after they neutralised their opposition with the help of Government who unlawfully extended the safeguard-duties on hot-rolled coil. Subsequently, one of the re-rollers notified the downstream that they will be withdrawing from the South African market.

Government, who has a 50% stake in one of the re-rollers, ignored the World Trade Organisation rules, by the manner in which the duties were extended, thereby jeopardizing the future of a company in which R 500 million of taxpayers’ money was invested – all this to protect the business-interests of the foreign Mittal-family.

If AMSA had any intention to address the shortages, they would never have started up on only half of its production capacity after lockdown. The skyrocketing prices amidst the shortages and the prevention of the importation of the shortfall by means of the duties, is a deliberate strategy aimed at saving AMSA.

Once again, in order to stop the carnage in the steel downstream, we call on Government to scrap all duties with immediate effect.

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

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