G/SG/N/8/ZAF/3  
 
19 July 2016  
(16-3862)  Page: 1/3  
Committee on Safeguards  Original: English  
 
 NOTIFICATION UNDER ARTICLE 12.1(B) OF THE AGREEMENT ON 
SAFEGUARDS ON FINDING A SERIOUS INJURY OR THREAT 
THEREOF CAUSED BY INCREASED IMPORTS 
SOUTH AFRICA 
Certain flat-rolled products of iron, non-alloy steel or other 
alloy steel (not including stainless steel) 
The following communication, dated 18 July 2016, is being circulated at the request of the 
Delegation of South Africa.  
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 Pursuant to Article 12.1(b) of the Agreement on Safeguards, the Government of South Africa 
hereby gives notification upon making a finding of serious injury caused by increased 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 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. 
 2  PROVIDE THE BASIS FOR: 
Making a preliminary determination, as provided for in Article 6, that increased imports have 
caused serious injury. 
 The International Trade Administration Commission of South African initiated an investigation 
pursuant to an application by South African Iron and Steel Institute (the Applicant), on behalf of 
the SACU industry in order to determine whether increased imports have caused serious injury to the domestic industry, within the meaning of the Agreement on Safeguards, in connection with 
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. 
 G/SG/N/8/ZAF/3 
 
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  The Commission made a preliminary determination on the following: 
(a) Unforeseen Developments 
The Commission made a preliminary determination on the following unforeseen developments: 
 The unprecedented steep rate of increase in steel production capacity;  
 The significant market downturns in emerging (and other) economies resulting in 
contraction of demand for steel; 
 Record export volumes by countries with excess capacity, fuelled by excess steel supply;  
 Recent trade measures by other countries worsen the situation of increased imports into 
the SACU where there are no trade measures in place;  
 The oversupply of steel (including the subject products) has led to a deterioration in the 
financial situation of steelmakers globally and also the SACU; and  
 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 fu rther increases of imports of the subject 
products. 
The Commission considered that the SA government committed to bind the ordinary customs duty 
on the imported products of flat hot rolled steel at 10% ad valorem . The effects of these 
obligations were that the industry went through a restructuring that saw the state owned entity 
unbundled and privatised and the government facilita ted the end or review of an old pricing model 
to improve the competitiveness of the industry. As such various measures have been taken to 
encourage competitiveness and sustainability of the industry. 
(b) Increased Imports 
The data evaluation for the purposes of determining increased imports covered the period 
1 January 2012 to 31 December 2014 plus additional seven months information for 2012 to 2015 
(1 January to 31 July).  
The Commission considered that the subject product is being imported into the SACU market in 
such increasing quantities in absolute terms and relative to SACU production. 
The Commission made a preliminary determination that recent, sudden, sharp and significant 
increase of the imports of the imported products  occurred in the period 2012 to 2013 full year and 
7 months periods, and the subject product continued to be imported in increased quantities both in 
absolute terms and relative to production. 
The Commission made a preliminary determination that these events cited were unforeseen 
developments which led to the imported product being imported into the SACU market in such 
increased quantities and under such conditions to cause serious injury to domestic producers of 
the SACU like product or directly competitive products. 
(c) Serious Injury 
The data evaluation for the purposes of de termining serious injury covered the period 
1 January 2012 to 31 December 2014 plus additional seven months information for 2012 to 2015 
(1 January to 31 July). G/SG/N/8/ZAF/3 
 
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  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 (approximately more than 70%) of the total domestic production of those products. 
There is sufficient evidence that the SACU industry is suffering serious injury in the form of a 
decline in sales volumes, output, market share, losses, utilisation of capacity and employment for the period 1 January 2012 to 31 December 2014. Th ere is also sufficient evidence that the SACU 
industry is suffering serious injury in the form of a decline in sales volumes, output, market share, 
losses, and utilisation of capacity for the seve n months period 1 January to 31 July (2012-2015). 
The Commission made a preliminary determination that the SACU industry is suffering serious 
injury. 
(d) Causal Link between Increased Imports and Serious Injury 
The Commission made a preliminary determination that there is sufficient evidence of serious 
injury to the domestic industry caused by the sudden enough, sharp enough, recent enough, and 
significant enough increase in the volume of imports. There are no other known factors other than the increased imports that sufficiently detract from this causal link. 
(e) Preliminary determination 
The Commission decided that there: 
 are unforeseen developments 
 is a surge  
 is serious injury caused by increased imports  
The Commission decided not to impose provisional measures. 
 
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