Government has proposed the scrapping of the five per cent duty on imported steel, which would come as great relief to local motor manufacturers.
Government has proposed the scrapping of the five per cent duty on imported steel, which would come as great relief to local motor manufacturers.
Steel prices have rocketed globally over the past few months and have long been blamed for the lack of growth in an industry with massive job-creating potential.
The scrapping of the duty is likely to see Ispat Iscor respond with a reduction in its prices, since it employs import-parity pricing. The company, which supplies the bulk of SA’s primary steel, aligns its prices with the price at which a steel buyer can import a certain steel product.
It warned that the proposed move might have a negative impact on the company and on the steel industry because of increased imports.
“We do not believe that it will be in the interests of the overall steel industry in SA, Ispat Iscor’s new chief executive, Davinder Chugh, told .
High steel prices saw the company’s headline earnings rocket over the past year. Government this year started taking action to adopt a friendlier pricing model for local consumers to facilitate growth in the steel industry.
Steel users can expect more relief as negotiations between the state and the steel manufacturer, which started last month, are reported to be progressing well. Its unknown when the negotiations will be completed, but Chugh said that Ispat Iscor wanted to complete these as soon as possible.
