Africa’s largest steel group, Mittal Steel South Africa, on Wednesday expressed disappointment at the decision by Minister of Trade and Industry Mandisi Mpahlwa to scrap the 5% import tariff on steel.
Earlier on Wednesday, Mpahlwa announced the removal of the 5% import tariff on certain primary carbon and stainless steel products with immediate effect.
“The 5% duty was already one of the lowest duties in the developing world. Most of the developing nations have duties higher than 5%,” Mittal Steel South Africa said.
Mittal Steel South Africa spokesperson Tami Didiza said governments keep such duties to protect capital-intensive industries like steel.
“The 5% duty, though very small, did act as a psychological deterrent against any dumping action. Some exporting countries that still enjoy substantial government subsidies get tempted to dump steel once a down cycle sets in,” he added.
Mittal Steel South Africa said since it is no longer utilising import parity pricing, the removal of the duty will not have any major effect on its market and performance.
The company said it will, however, examine the possible implications of the decision.
“In principle, though disappointed, we respect government’s decision on this matter,” Didiza said. “We will have to be vigilant against any possible dumping.”
Competition
The removal of the 5% import tariff on certain primary carbon and stainless-steel products will introduce greater competition into the domestic market and benefit local vehicle manufacturers, National Association of Automobile Manufacturers of South Africa director Nico Vermeulen said.
The removal of the tariff will place greater pressure on the local suppliers of carbon and stainless steel regarding the price and quality of the products, according to Vermeulen.
The two forms of steel are mainly used in car exhaust systems and in the making of automobile bodies, he added.
Columbus Stainless spokesperson Jenny Smit said the company would only be able to comment on Thursday. — I-Net Bridge