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In a report released on Monday, the South African International Trade Administration (ITAC) stated that a wave of cheap products from markets such as China and India, coupled with persistent import tax evasion and customs fraud, and geopolitical tensions, is putting “significant pressure on the already struggling domestic steel industry.”

The agency concluded that this situation provides grounds for raising customs duties to the ceiling levels committed to the World Trade Organization (WTO).

The panel proposed a 10% tariff on nearly 20 flat-rolled steel and rebar products currently not subject to tariffs “to address the surge in imports, price manipulation, and tax evasion affecting the domestic steel industry.”

The agency also proposed increasing tariffs on more than 40 categories of steel pipes, tubes, barriers, and bolts from 10% to 15%, and planned to impose a 20% tariff on various tools and knives.

The committee wants to establish rebate regulations for certain categories of flat-rolled steel products “to ensure downstream manufacturers can access input materials not produced domestically,” and to apply import controls to more than 20 products, from corrugated roofing sheets to tanks and reservoirs.

ITAC also proposed establishing a monitoring system to prevent import tax evasion, customs fraud, misdeclaration, and under-invoice valuation.

South Africa's annual steel production has plummeted from 9.7 million tonnes in 2006 to around 4.5 million tonnes last year, as domestic producers struggled to compete with cheap imported steel from China, while also facing soaring electricity and logistics costs, and a sluggish economy.

Last year, ArcelorMittal South Africa Ltd. closed a steel production facility, citing competition from mini-steel mills that use scrap steel as a raw material instead of iron ore.

The company, which still operates Africa's largest steel mill south of Johannesburg, has asked the government to end the 20% tariff on scrap steel exports, which it argues is driving down the cost of raw materials for competitors.

ITAC has forwarded its findings to the Minister for Trade, Industry and Competition, Parks Tau, for review.

Source: Vietnambiz