Open letter argues against safeguard duty for ArcelorMittal

IN YET another open letter to Trade and Industry Minister Rob Davies, the National Employers Association of SA (Neasa) yesterday urged the government not to grant a 30 percent safeguard duty on imports requested by ArcelorMittal South Africa.

In the letter, Neasa chief executive Gerhard Papenfus said: “The purpose of this letter is to urge you to intervene urgently on the issue of the protectionist measures favouring (ArcelorMittal) – both the 10 percent customs duties already introduced as well as the further 30 percent safeguard duties now being requested by (ArcelorMittal).”

“The downstream steel industry is already severely prejudiced by the slow poisoning effect of the 10 percent duties introduced approximately one year ago.”

He said the downstream industry was “vehemently” opposed to import duties and any further protection.

This is the latest open letter Papenfus has written to Davies to complain about ArcelorMittal.

In another letter, dated July 5, he also lashed out at what he termed “protectionist” duties.

Papenfus said ArcelorMittal produced steel at more than $500 (R6 486) a ton with the current selling selling price of $570 a ton compared with the world average selling price of $425 a ton.

“Most modern technology mills have returned to profitability at the level of $425 a ton,” he said.

Attempts to get comment from Davies’ office yesterday were unsuccessful.

But last month Davies told Parliament that the government would not surrender the steel industry and be at the mercy of the global steel markets in the long run.

ArceloMittal said without a downstream industry, it would not have customers for its product and therefore it is important that a solution be found to ensure the sustainability of the primary steel industry as well as the downstream industry.

The companysaid already had certain rebates to support the downstream.

Also to the extent necessary, ArcelorMittal would also support the downstream with obtaining duties on finished products, the company said.

“ As a country we need sustainable solutions for economic growth, and we cannot allow short term benefits - cheap imports, to prejudice longer term goals. The short term benefit could lead to the shutting of a critical industry which will take years to rebuild.

“Without a primary steel industry, the downstream will be susceptible to high prices, which is what may happen without a local manufacturing capability.

“We need work together with all stakeholders to find a solution and already many stakeholders support such a collaborative approach.”