In Commodity News 08/01/2016
South Africa extended tariffs on some steel imports as producers continue to battle a glut of cheap supply from China, according to the local unit of ArcelorMittal, which is selling shares, cutting jobs and closing plants as it seeks to return to annual profitability for the first time since 2010.
Further duties on wire-rod and rebar products will be levied in addition to a 10% tariff that the government introduced in August on imports of products the same as those that are also locally produced, ArcelorMittal South Africa said in a statement on Thursday. AMSA, as the unit of the world’s largest steelmaker is known, is still awaiting the outcome of a further seven applications made to the country’s International Trade Administration Commission for protection from imports, the company said. Final decisions are expected early this year.
The steelmaker is selling shares for R4.5 billion ($281 million) to reduce debt and invest in plants and has asked the government to source steel exclusively from local producers for infrastructure projects.
“The company still faces challenges and future profitability is highly dependent on the above initiatives being successfully concluded,” AMSA said. Without additional tariffs and government support, “the steel industry and the company will need to undertake significant structural change.”
The stock increased 3.2% to R4.23 by 10:3am in Johannesburg. It declined 83% in 2015 and 29% the previous year.