Dear Steel Industry employer
Government has recently introduced duties that range from 10 to 30% on about 600 tariff codes relating to finished steel products.
Steel manufacturers were recently stunned by the sudden increase in components that they import to manufacture products locally. Manufacturers who had committed to future customer pricing were especially hard hit.
It is impossible to name every affected product, but examples include fencing, screws, hand tools, certain pipes, caps, and more. Many of these products included in the 600 tariff codes are not even manufactured in South Africa. Instead of excluding those products, you must now apply for exemption from these tariffs if the product is not manufactured locally.
| What led to the introduction of the import duties on finished steel products? During the course of 2015, Government introduced duties starting at 10% on raw material such as galvanised and hot-rolled coil. This has, over time, increased to more than 80%. These increases were as a result of the modernisation of steel production abroad, which made imported raw material much more cost-effective than the local product, where ArcelorMittal South Africa (AMSA) has a complete monopoly on certain flat products. AMSA never invested sufficiently in its ageing plant. It is now an expensive producer protected by the duties imposed by Government. As a result of the expensive raw material, manufacturers imported finished components. This resulted in the disastrous decline and job losses in the South African Steel Industry. |
To address the shifting import pattern, which came as a result of the duties on imported raw material, Government has introduced duties on finished components, thereby yet again, attempting to force manufacturers to buy local, expensive raw material and manufacture components locally.
The effect of this new blanket implementation on so many products will most certainly lead to an instant cash benefit for Government, ranging from 6 to 18 billion rand, and all South Africans will have to foot the bill by paying more for any steel-related products. This will put pressure on consumers since steel forms part of everyday living expenses, including transport, the factory or building you work in, cutlery, cookware, and an endless list of 600 tariff codes.
NEASA encourages members within the Steel Industry to contact XA Global Trade Advisors for assistance with obtaining rebate permits once the relevant Government guidelines have been published.
Note that the exemption application process may involve fees, which will be managed directly between yourselves and XA Global Trade Advisors.
NEASA will keep members abreast of further developments in this regard.
For more information
NEASA Media Department
media@neasa.co.za
