Patel no for welded link chain duties

23 Mar 2023

22 March 2023
Business Day
by Michelle Gumede

Trade, Industry & Competition Minister Ebrahim Patel, has rejected a recommendation by the International Trade Administration Commission of SA (ITAC), to impose anti-dumping duties on welded link chains imported from China, saying there is no certainty they have inflicted material injury. Welded link chains are steel chains used in lumber, paper, pump, forestry and agricultural applications and in other industries because of their strength, despite the specialist trade advisory body's findings that local industry is being harmed.

Patel said the volumes of the "dumped" imports fell during the investigation period – while the overall market share of the local applicant appeared to be rising. The minister is empowered to accept, reject or refer a recommendation back to ITAC. "In this instance, the minister was of the view that the Commission's recommendation did not duly empower him to establish, to a reasonable degree of certainty, that material injury or the threat of it from dumped imports, had been inflicted on the applicant, “ITAC spokesperson Thalukanyo Nangammbi said.

This is the department's latest rejection of protectionist measures requested by local industries. In August last year, Patel suspended anti-dumping duties against poultry imports from Brazil, Denmark, Ireland, Poland and Spain for 12 months. The latest probe into the Chinese dumping of welded link chains began in 2021, after industrial chain manufacturer and mass chain supplier McKinnon Chain, a division of integrated steelmaker Scaw SA, submitted an application to ITAC.

McKinnon Chain alleged that articulated welded link chains manufactured from round section iron or steel wire, bars or rods of a diameter of 4Ammor more, but not exceeding 20mm are being dumped on the Southern African Customs Union (Sacu) market, bringing the threat of material injury to the regional industry. Scaw SA launched a similar application in 2007 with ITAC. The ITAC findings supported the applicant's claim and determined that dumping of the product from China was taking place. It also said this was causing material injury to the industry.

The SA Revenue Service (Sars) last year announced it was imposing anti-dumping duties on non-articulated welded link chains of 11%-16%, based on ITAC’s preliminary conclusions. Part of Patel's rationale was that the overall market share of the local applicant appeared to be rising over the period of investigation amid a significant reduction in Chinese imports. “The minister further observed, based on the Commission's report, that the decline in imports was more rapid than the rate of decline in domestic consumption," the Government Gazette said. Patel said the applicant appeared to be performing better than reported drops in consumption levels, suggesting a marginal improvement in performance relative available market. The applicant's factory selling price rose over the investigation period, and suffer price undercutting.

Patel attributed any recent declines experienced to the Covid-19 pandemic which razed the activities of many sectors. "The minister found that though the information available indicated that sales volumes, output and capacity utilisation all declined over the investigation period, these declines appeared to be in line with broader trends in the economy resulting from economic disruptions caused by and associated with Covid-19."

Acknowledging that the global economy is in recovery from the effects of the pandemic and that circumstances may change, Patel instead requested that ITAC should monitor imports of welded link chains and "act where required to protect the local industry from unfair trade". ITAC will now have the responsibility to go back to the drawing board. But the applicant has the legal option to review the minister's decision through the high court.