Steel duty in S. Africa depends on Iscor talks

Steel duty in S. Africa depends on Iscor talks

After the South African government concludes its negotiations with Ispat Iscor regarding the company's new pricing model the government will reportedly decide whether or not to revoke a %5 duty on imported steel. Since Ispat Iscor applies import parity pricing and holds the monopoly in the South African steel sector, the duty cut is expected to reduce the price of both imported and domestic material. Because Iscor adjusts its prices according to the import price levels of the products, South African domestic companies that depend upon Iscor's products are forced to pay higher prices. Downstream industries and domestic users bear the brunt of the burden from this pricing system. The government previously announced plans to reduce or revoke the duty on imported steel, and added that it would particularly investigate the effects on downstream industries. The government is expected to complete its investigation within two months. Meanwhile, discussions with Ispat Iscor regarding the company's new pricing model continue. The government may reduce the duty on imported steel after these discussions, according to various sources.