The Steel Master Plan

   

At this very difficult stage in the history of the world, our country and industry; Sassda is working with the dtic as a major partner to alleviate pressure in, and create positive outcomes for, the stainless steel sector.

Key interventions already provided by dtic.

The following support is already in place for industry and will be continuing:

  • Trade support provided:
    • Increase in the general rate of customs duty on primary steel products to 10% and safeguard measures on hot rolled coil and plate products.
    • Tariff increases on a range of downstream products to the maximum bound rates allowed; trade remedies; deployment of rebates where products are not manufactured, or additional value added before export.
    • SARS reference price system developed for steel products to address low priced imports and inter-agency working group established to tackle illegal trade
  • The use of local procurement by government to boost aggregate demand:
      • Primary steel was undeemed in the early rounds of designations to encourage the use of locally manufactured primary steel.
      • All major steel intensive products are designated under the PPPFA (Rail Infrastructure; Rail Rolling Stock; Steel Products; Powerlines; Pipes and Pipe Fittings; Valves; Pumps; Vessels)
  • In 2017, established a R1.5 bn Steel Competitiveness Fund to support upgrading, working capital requirements, investments and key downstream steel sectors in distress
  • Various support measures to AMSA – SA major steel producer and a monopoly in flat steel production (i.e. Saldanha Steel intervention that has not prevented a closure)
  • Highveld Steel intervention that saved a major industrial complex
  • Implemented the Price Preference System to ensure availability of good quality scrap metals for further processing in the domestic market as measure to support steel mini mills and the foundry industry

Since the initiation of the Master Steel Plan in the second half of 2019 some additional measures were put in place:

  • The Steel Fund criteria and lending rates were amended to improve accessibility of the fund to the industry as well reduce the cost of lending for small and medium companies
  • Additional designations to support the job intensive steel downstream sectors (approved by National Treasury in January 2020):
    Amendment to the steel conveyancing pipe designation to exclude ductile iron pipe from State procurement
    Bulk Materials Handling – conveyor systems
  • Export tax on Scrap Metals was announced by Minister Tito Mboweni during the 2020 Budget Speech, implementation modalities under being finalised. National Treasury has initiated the industry consultation processes, which will be in 2 phases:
    • The first phase has commenced and run up to the end of April 2020
    • The second phase will commence with the publication of the Taxation Laws Amendment Bill in mid-July and run up to the end of August/September 2020