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The key to rescuing South Africa\u2019s ailing steel industry, in which a unit of ArcelorMittal SA is feuding with smaller competitors, is by growing demand rather than fixating on export controls, the country\u2019s chief trade regulator said.<\/p>\n
ArcelorMittal South Africa last year shut a steel mill, citing competition from so-called mini-mills that use scrap metal as their feedstock rather than iron ore. The company, which still runs Africa\u2019s biggest steelmaking plant south of Johannesburg, has demanded the government end a 20% tax on the export of scrap, which it says reduces the cost of the material for its rivals.<\/p>\n
Read: Local steel processors eye stake in Amsa assets<\/p>\n
\u201cThere\u2019s a bubbling belligerence that says I can only survive by you kind of killing that instrument,\u201d Ayabonga Cawe, chief commissioner of South Africa\u2019s International Trade Administration Commission, said in an interview on Thursday at Bloomberg\u2019s office in Johannesburg. Instead, the issue that needs to be addressed is \u201chow do you fix on the demand side,\u201d he said.<\/p>\n
Read:\u00a0Amsa, IDC reopen deal talks with non-binding offer for mills<\/p>\n
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South Africa\u2019s annual steel production collapsed to about 4.5 million tons last year from 9.7 million tons in 2006, with domestic producers struggling to compete with cheaper Chinese imports, while contending with surging power and logistics costs, and a stagnant economy.<\/p>\n
We need \u201ca rapid and aggressive infrastructure program,\u201d Cawe said. The ITAC is responsible for customs tariff investigations and recommending trade remedies including import and export controls.<\/p>\n
Read:\u00a0ArcelorMittal, IDC end exclusive talks with no deal<\/p>\n
While Arcelor uses coking coal to fire blast furnaces that convert iron ore into steel, rivals including Scaw Metals Group and Cape Gate Holdings. use electric arc furnaces to melt scrap. In addition to the export tax, the electric-furnace operators benefit from controls on the price of scrap, which are set at a discount to the international price. The discounts were implemented in 2013 and the tax in 2020.<\/p>\n
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Read:\u00a0ArcelorMittal M&A head holds talks in South Africa over unit sale<\/p>\n
As steel scrap is a recycled material, it\u2019s more environmentally friendly than iron ore and is therefore a strategic material, Cawe said. Prior to the imposition of export controls in 2013, South Africa shipped more than a million tons of scrap to India annually, he said.<\/p>\n
Read:\u00a0ArcelorMittal may get R8.5bn IDC bid for SA unit<\/p>\n
\u201cIf we can all agree that in principle that scrap in strategic material that has to be regulated, then we can have a debate about how you recalibrate the different rents,\u201d he said. \u201cWe must find a balance, but that balance I am afraid is framed in very antagonistic terms.\u201d<\/p>\n
\u00a9 2026 Bloomberg<\/p>\n
#South #Africa #steel #demand #belligerence #regulator<\/p>\n","protected":false},"excerpt":{"rendered":"
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