Essential for SA to retain primary steel industry

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As former editor of Business Day and the Financial Mail, Peter Bruce should know that it is advisable to talk to a wide range of firms in the steel and steel products industry before writing about a contentious issue, rather than quoting the views of one industrialist, whose views are not representative of the views of business across the industry, upstream and downstream.

SS Profiling CEO Theunis Duvenhage explained his views on February 9 to the Steel Oversight Council ; he believes tariffs should be removed on everything upstream and downstream. However, most other industrialists say this would aggravate the loss of jobs, rather than make the industry more competitive. Some allege, for instance, that certain finished products come into SA below the international price of steel scrap.

The Steel Master Plan, which I have been working on with industry and government stakeholders, recognises that temporary trade and support measures for the upstream and downstream industries are necessary to help the steel industry survive in the short term. Trade distortions in the steel industry internationally have been widely identified and reported on, with many developed and developing countries deploying steep duties and trade remedy tools to protect their industries.

An important issue that came up in the discussion at the council, and which is dealt with at length in the master plan, is the pricing of carbon steel. The minister has embraced the council’s call for transparency in the basket price. The council will discuss the cost of inputs, especially iron ore, coal, steel scrap, electricity and rail and port logistics. It will also discuss studies of the margins that are taken all long the price chain, from primary producer to retail customer.

 

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