Safeguard duty on steel imports to help save Vaal long steel jobs
The safeguard duty is still temporary as it is an emergency measure.
A 9% safeguard import duty has been slapped on imported hot rolled steel as part of a range of steps to bolster and prevent the closure of ArcelorMittal South Africa’s long steel plants in Emfuleni and in Newcastle, KwaZulu/Natal.
Implemented last week, the new safeguard duty was granted by ITAC ( International Trade Administration Commission) after an application by the SA Iron and Steel Institute (SAISI) on behalf of steel giant ArcelorMittal South Africa to prevent a flood of cheap steel being dumped on the South African market.
Cheap imports were doing major damage to the South African steel industry, SAISI argued and ITAC and other stakeholders had noted a measurable increase in steel imports into South Africa before the safeguard duty was imposed.
The move follows a dramatic recent announcement by ArcelorMittal South Africa that it no longer intends closing its long steel production plants in Vereeniging and Newcastle on the basis of the expected duty and other business-sustainability measures taken by the Company.
About 200 permanent jobs and hundreds more contractor positions were under threat in the Vaal along with many more in Newcastle before CEO Kobus Verster recently announced a series of steps to prevent such an eventuality.
Verster cited the promise of a 9% safeguard duty and improvements in rail distribution and port management by Transnet in halting the long steel closures.
Safeguard duties can be imposed on imports under the World Trade Organisation (WTO) agreement on Safeguards.
According to ITAC, a global over-supply of steel led to a significant increase in export volumes by countries, such as China, with excess capacity and over-production of steel.