Imports of screws from China have been slapped with a hefty antidumping duty this month after an investigation by a South African trade authority found they were causing local manufacturers "material injury".
The antidumping measures are seen as an extension of existing antidumping measures against Chinese manufacturers of nuts and bolts.
The International Trade Administration Commission of SA (Itac) completed its preliminary investigation into the import of fully threaded screws with hexagonal heads, excluding stainless steel screws from China, and introduced an antidumping duty of 104,5% to protect the industry in the interim. This would allow it to finalise the investigation.
The South African Fasteners Manufacturers’ Association, an industry body that represents 80% of the production volumes in the Southern African Customs Union, had brought the application.
Set screws are similar to fully threaded bolts and are critical for the mining, construction and agricultural sectors. SA imports about 500 tons a month, which is the equivalent of the monthly production of an entire local factory.
Itac introduced antidumping duties in recent months against boneless chicken cuts from Brazil after a successful application by the South African Poultry Association.
It has also increased the import duty on kitchen sinks to the maximum level of 30% in terms of World Trade Organisation rules after it found the domestic market share of a local manufacturer plummeted as sinks continued to be imported at artificially low prices. The imports were mainly from east Asia.
In July last year, the South African Fasteners Manufacturers’ Association submitted evidence to Itac on prima facie proof of dumping. This showed price undercutting, price depression, price suppression, a decline in capacity utilisation, a decline in output, an increase in inventory levels, a decline in sales volumes and a decline in profit.
Rob Pietersma, the chairman of the association, said it had brought the application on behalf of the two largest manufacturers of set screws, CBC Fasteners and Transvaal Press.
After the application had been brought, Daltron Forge, which makes set screws as well as nuts and bolts, had to close a large part of its operation.
Mr Pietersma said the commission’s award of the provisional payment of an additional 104,5% was certainly appropriate considering the effect it would have on protecting jobs.
George Geringer, a senior manager at PwC representing the association, said the Chinese manufacturers had responded to the investigation but their responses had been deficient. The provisional payment would apply until the investigation had been completed and the responses had been found to be satisfactory.
It would then decide whether the provisional payment was justifiable, Mr Geringer said.
Mr Pietersma said the latest measures were an extension of antidumping measures against Chinese manufacturers of nuts and bolts that had been in force since 1999. The additional duty on bolts amounted to 55% and on nuts to 122%.
Canada and the European Union have duties in place against Chinese screws, nuts and bolts, and the US is considering introducing them.
The commission confirmed that the provisional payment had been introduced and that it would remain in force until November 2, when the investigation was expected to be finalised.