Please pay attention to this notice if you are in the downstream steel sector!
ArcelorMittal South Africa (AMSA), the only local producer of primary steel, has struggled to meet local demand for a wide variety of steel products for a long while now. They however still benefit from a 10% normal customs duty, plus an 8% safeguard duty (the safeguard duty is being challenged in court at the moment). This makes the duties on hot-rolled steel higher than most downstream stream steel products. If AMSA can’t meet demand and the imports carry a large duty, you can very quickly see how devastating this is to the downstream industry.
On 9 February 2021, ITAC circulated a letter to certain companies in the downstream steel sector (the circulation list is not known at this point), asking for comments on “the possible creation of a rebate facility of customs and safeguard duties to cover imported flat steel products used by the downstream industry.”
This letter follows a trade policy directive issued from Minister Patel to ITAC to investigate the creation of the rebate. The trade policy directive has not been published though, so the detailed reasoning of the Minister is not clear at this point. We are however told that “the directive cites complaints that have been received from the downstream sector with regards to shortage of steel”.
It is clear that this is a proper investigation by ITAC, as they state that in their letter, but it is odd that this was not gazetted, but rather circulated to a closed group of companies.
The steel shortage is an extremely serious problem. If you support the idea of a full rebate of duty while the shortage persists, be sure to respond fully to the investigation.
The deadline to respond is 19 February 2021.
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