Macsteel Settles Safeguard Action – A two-year reprieve from Future Safeguard Duties

Macsteel, one of South Africa’s largest steel manufacturers, merchandisers and distributors has agreed to a settlement with the Minister of Department of Trade, Industry & Competition to eliminate the future extension of the safeguard duty on hot-rolled steel for at least the next two years, within which no further safeguard duties can be imposed – a move that will provide improved market choice and trading opportunity to local steel fabricators and the downstream sector.

“We see this as a significant victory for fabrication businesses and the downstream sector of South Africa which will stimulate “enormous growth” in the steel fabrication industry and small and medium companies in the downstream value chain,” says Mike Benfield, CEO of Macsteel.  “We will engage actively with the Minister to address the approach to Safeguard duties after the two-year period and will oppose any move to bring any action to invalidate this settlement agreement

“The reprieve will go a long way in contributing to more choice in primary steel at competitive pricing not to mention quality.  We believe in a market that is free and fair and AMSA, a privately owned company, should not enjoy more protection than the downstream sector is afforded, especially if it has a negative effect on the economy,” adds Benfield

“Without the safeguard duty, fabricators will now be open to compete on a level playing field and export steel products, boosting the prospects of the sector,” concludes Benfield.

The matter was settled in the High Court in Pretoria on 22 June 2021.

The safeguard duty was imposed three years ago by the International Trade Administration Commission (ITAC) to protect local steel production by Arcelor Mittal in the face of rising imports from China. This was intended as a temporary duty of 12% initially, reduced to 8% and meant to reduce to zero at the end of the term in August 2020. This was over-and-above the normal import duty (10%) of these products. The Minister’s decision to extend the duties after it expired and before it had received responses from the industry, contravened local and international legislation.

Macsteel’s application was served on the office of the Minister of Trade, Industry and Competition (DTIC), the office of the Minister of Finance, ITAC, and the Commissioner of the South African Revenue Services (SARS). It asked the High Court for a review in terms of section 46 of the International Trade Administration Act no. 71 of 2002 (“the ITA Act”) to set aside the unlawful extension of certain safeguard duties on specified steel products