JOHANNESBURG: ArcelorMittal South Africa on Tuesday reported a 19.1% drop in steel sales for the three months to end-September as its business was hit by weak demand and cheap imports. The steelmaker, a unit of ArcelorMittal, posted third quarter production of 1.12 million tonnes, a drop of 5.7% compared to the same period a year ago. Sales came in at 950 000 tonnes, compared to 1.17 million tonnes a year ago. “ArcelorMittal South Africa has been experiencing tough trading conditions mainly as a result of lower steel demand due to poor economic activity and ongoing imports,” chief executive Wim de Klerk said in a statement.
Local steelmakers have been battling to survive, but last year got some relief when South Africa imposed a 10% tariff on imports. Data on Tuesday showed imports of cold-rolled steel from countries including China are hurting South African producers, after ArcelorMittal further requested that safeguard duties, also known as emergency tariffs, be imposed. “Having declined slightly from 2015 levels, imports are still high despite the 10% duties having been imposed,” the firm said. “The need for additional protection through safeguards is therefore imperative to address the surge in imports.” The company expects tough conditions to continue in the fourth quarter, but sees export sales increasing due to completed maintenance on its export-oriented Saldanha plant.
