Ailing steel industry needs help fast, says minister
CAPE TOWN — The Government accepts that there are compelling reasons to urgently find remedies to assist the embattled steel industry, Economic Development Minister Ebrahim Patel says.
His department and the Department of Trade and Industry are looking at remedies to assist the industry, which has been hit by cheap imports from China that led to plant closures, financial difficulties and threatened job losses.
In an interview before a briefing to Parliament’s economic development committee yesterday, Mr Patel said the South African industry was suffering, along with steel producers throughout the world, on account of a glut of steel on the international market and a fall-off in demand in China.
“This has placed steel makers across the world under enormous pressure and the local industry is no different,” Mr Patel said.
Two remedies were under consideration. One was a trade remedy that the International Trade Administration Commission was working on. The other was linked to government’s policy of localisation. Mr Patel said a remedy linked to localisation would have to be carefully considered as government wanted to constrain the costs of its infrastructure projects.
“We have to be prudent. We have to find a remedy that will not have significant negative effects on the downstream.”
In a separate briefing to the portfolio committee on trade and industry, Trade and Industry Minister Rob Davies said the glut on the international market had resulted in steel being “dumped” in SA.
Responding to Democratic Alliance spokesman on trade and industry Geordin Hill-Lewis, who said he was shocked to learn that all the steel used in the Medupi and Kusile projects was imported, trade and industry deputy director-general Garth Strachan said it appeared that the quality of certain steel products made in SA was not up to scratch. There had been weaknesses in capital investment by SA’s “key steel producer” and a decline in its competitiveness in relation to pricing and supply and in the range of products produced. It was a cause for concern that production of certain products had been discontinued.