G/SG/N/6/ZAF/4  
 
4 April 2016  
(16-1866)  Page: 1/3  
Committee on Safeguards  Original: English  
 
NOTIFICATION UNDER ARTICLE 12.1(A) OF THE AGREEMENT ON SAFEGUARDS 
ON INITIATION OF AN INVESTIGATION AND THE REASONS FOR IT 
SOUTH AFRICA 
(certain flat-rolled products of iron, non-alloy steel or 
other alloy steel (not including stainless steel)) 
 
The following communication, dated 4 April 2016, is being circulated at the request of the Delegation 
of South Africa.  
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 Pursuant to Article 12.1(a) of the Agreement on Sa feguards, South Africa hereby gives notification 
of the initiation of a safeguard investigation on the imports of certain flat-rolled products of iron, 
non-alloy steel or other alloy steel (not including stainless steel), whether or not in coils (including products cut-to-length and 'narrow strip'), not further worked than hot-rolled (hot-rolled flat), not 
clad, plated or coated, excluding grain-oriented silicon electrical steel. 
 1. The date when the investigation was initiated  
The investigation was initiated on 24 March 2016. The notice of initiation by the investigating 
authority was published through notice No: 149 of 2016 in Government Gazette No. 39860 on 24 March 2016.
1 
 
2. The product subject to the investigation  
The subject product is described as certain flat-rolled products of iron, non-alloy steel or other 
alloy steel (not including stainless steel), whether or not in coils (including products cut-to-length and 'narrow strip'), not further worked than hot-roll ed (hot-rolled flat), not clad, plated or coated, 
excluding grain-oriented silicon electrical steel, imported under tariff subheading 7208.10, 
7208.25, 7208.26, 7208.27, 7208.36, 7208.37, 7208.38, 7208.39, 7208.40, 7208.51, 7208.52, 
7208.53, 7208.54, 7208.90, 7211.14, 7211.19, 7225.30, 7225.40, 7225.99, 7226.91 and 7226.99. 
 
3. The reasons for the initiation of investigation  
i. The application was lodged by South Afri can Iron & Steel Institute (SAISI) an 
industry body, on behalf of its members producing the subject products. 
The claim is that the subject product is being imported into the SACU market in such 
increasing quantities in absolute terms and relative to SACU production and under 
such conditions, to be causing serious injury to the SACU industry. 
 
ii. Prima facie information on which the investigation was initiated: 
                                               
1 A copy of notice No: 149 of 2016 in Government Gazette No. 39860 has been submitted electronically. 
To consult this document please contact Ms. Budd ( Hilary.Budd@wto.org ) or Ms. Richards 
(Anne.Richards@wto.org ) of the Rules Division. G/SG/N/6/ZAF/4 
 
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  The Commission found that the applicant subm itted prima facie information to indicate 
that the net volume of certain flat-rolled products of iron, non-alloy steel or other alloy steel (not including stainless steel), whether or not in coils (including products cut-to-length and 'narrow strip'), not further worked than hot-rolled (hot-rolled flat), 
not clad, plated or coated, excluding grain-oriented silicon electrical steel imports 
increased sharply both in absolute terms and relative to domestic production in the 2013 (1 January to 31 December & 1 January to 31 July) period.  
 
SERIOUS INJURY AND CAUSAL LINK  The period of investigation for data evaluation for the purposes of determining the allegation of 
serious injury is 1 January 2012 to 31 December 2014 plus additional seven months information 
for 2012 to 2015 (1 January to 31 July).   
The injury analysis relates to information submitted by ArcelorMittal South Africa Limited 
(AMSA's), a member of SAISI with a collective output of the like or directly competitive products 
constituting a major proportion (more than 70%) of the total domestic production of those 
products.  
 The Applicant alleged and submitted prima facie information indicating that it is experiencing serious injury in the form of a decline in sales volumes, output, market share, utilisation of 
capacity and employment for the period 1 January 2012 to 31 December 2014. The applicant 
further experienced serious injury in the form of a decline in sales volumes, output, market share, and utilisation of capacity for the seven months period 1 January to 31 July (2012 – 2015).  
 
On this basis the Commission found that prima facie information was submitted to indicate that the SACU industry was suffering serious injury which could be causally linked to the surge in the 
volumes of imports of the subject products.  
 UNFORESEEN DEVELOPMENTS  
The Applicant submitted that a confluence of  events forms the basis of the unforeseen 
development that supports this application. That is, ultimately the considerable oversupply of steel, and specifically the subject products, in the world today causing a surge in the volumes of 
imports into the SACU.  
 The Applicant stated that during the Uruguay Round  of negotiations, South Africa did not foresee 
the following events: 
  The unprecedented steep rate of increase in st eel production capacity (including the subject 
products) over the ensuing two decades (more than doubled since 1994) to support growing 
construction and manufacturing activity, as well as to help build infrastructure, particularly 
in emerging economies; 
 The significant market downturns in emerging  (and other) economies and the resultant 
contraction of demand for steel that contri bute to the imbalance between capacity and 
demand, that is, the global oversupply of steel (including the subject products); 
 Record export volumes by countries with excess capacity, fuelled by excess steel supply;  
 Given the global nature of the steel industry, excess capacity in one region can potentially 
displace production in other regions, thus harming producers in those markets. This has 
already led to several trade actions by major steel markets. Recent trade measures by those countries are a result of all the above name d unforeseen developments, and the fact that 
their markets are now protected, contracts the global demand for steel even further, 
exasperating the problem of increased imports into the SACU; 
 The oversupply of steel (including the subject products) has led to a deterioration in the 
financial situation of steelmakers globally and also the SACU. The excess capacity is 
considered as one of the main challenges facing the global steel sector today; and  G/SG/N/6/ZAF/4 
 
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   Despite slowing demand growth and the exis ting excess capacity, there are several new 
investment projects underway and planned (especially in current net-importing countries) in the steel industry that will result in global steelmaking capacity to continue to expand and causing the SACU to expect further increases of imports of the subject products. 
 
4. Further information  
i. Interested parties must make themselves known within a period of 20 days after the 
initiation of the investigation. 
ii. Any information which the interested parties may wish to submit in writing and any 
request for a hearing before the Commission that they may wish to put forward 
should be submitted within 20 days following the initiation of this investigation to the 
Directorate: Trade Remedies II at the following address: The DTI Campus, 77 Meintjies Street, Sunnyside Pretoria, Block Uuzaji, Ground Floor, 
tel: +27 12 394 3600, fax +27 12 394 0518. 
iii. If part of the information provided is of a confidential nature, the party concerned 
should give the grounds justifying confidentiality and furnish public summaries of 
such information, which should be as detailed as possible. In instances that a public 
summary cannot be provided a sworn statement must be provided stating the reasons why the information cannot be summarized. This requirement is designed to secure transparency and due access by all the parties to the information relating to 
this investigation. If the summaries are not duly provided and in the absence of just 
cause, ITAC may disregard the information deemed to be confidential. 
 
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