The Steel and Engineering Industries Federation of Southern Africa (Seifsa) says it is extremely concerned that the challenges facing the local steel industry will only worsen if the US Department of Commerce and the US International Trade Commissions’ (ITC’s) parallel investigations to determine if US producers have been harmed by carbon and alloy steel wire rod imports from Italy, the Republic of Korea, South Africa, Spain, Turkey, Ukraine and/or the UK, prove positive.

Seifsa chief economist Michael Ade said in a statement on Monday that affirmative determinations, coupled with the ITC’s final injury determinations, will result in the commerce department issuing antidumping orders and imposing relevant duties, thus increasing local steel producers’ export costs, and this will eventually squeeze their profit margins.

The Department of Commerce’s preliminary determinations indicate that producers and exporters in the seven countries have sold carbon and alloy wire rod in the US at less than fair value. 

Ade said foreign companies that price their products in the US market below the cost of production or below prices in their home markets are subject to antidumping duties.

“The investigation of South Africa found that exporters dumped wire rod in the US at margins of 142.26% based on adverse facts available. All other producers and exporters in South Africa were assigned a rate of 135.46%,” Ade said.

He added that Seifsa believes the investigation by the US is a “tit-for-tat” retaliation for the South African steel industry successfully pushing for import tariffs and safeguard duties from cheap international imports.

Ade noted that the US enquiry appeared to be only the tip of the iceberg and could be a precursor to extension to other steel products, potentially resulting in many overseas trading partners starting to retaliate and to protect their steel industries.

“This is of grave concern to Seifsa, given the strategic importance of the local steel industry. The need for unity, including support for a sector-related government policy stance from all stakeholders across the value chain of the local steel industry, is imperative,” he said.

The US Department of Commerce is currently scheduled to announce its final antidumping determinations on January 9, 2018.