The Competition Commission said on Friday that is was launching a new market inquiry into the South African steel industry.
It had gazetted the draft terms of reference for the probe on April 7.
The commission said it would examine whether or not there were any features or a combination of features in its value chain that impede, distort or restrict competition in the South African steel industry.
“A market inquiry is a general investigation into the state, nature and form of competition in a market rather than an investigation of specific conduct by any particular firm,” it said, saying the industry was a driver of inclusive growth in the South African economy.
The commission had prioritised the intermediate and industrial sectors since 2008 due to the sector being linked to the production of various consumer goods and the potential of the sector to create significant employment opportunities.
“In 2014, the South African steel industry was ranked 19th in terms of global crude steel production and was the largest producer on the African continent, producing more than half of the continent’s steel output.
“In 2021, South Africa was ranked as the 32nd largest crude steel producer in the world, with an output of 5.0Mt. This indicates that South Africa’s competitiveness in the production and supply of steel has been declining. The commission has in the past intervened in this industry through merger control and enforcement investigations,” it said.
The inquiry would examine the raw materials and inputs as well as the upstream steel production level. In addition, the inquiry would focus on the impact of these levels of the value chain on the domestic downstream steel market, the commission said.
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