Rolled aluminium at Hulamin's factory in Pietermaritzburg. South Africa predominantly exports primary aluminium and semi-fabricated products such as aluminium plates, sheets, and foil.
Image: Supplied
Banele Ginidza
The aluminium sector has said it was relieved to seem exempted from the sweeping 30% tariffs on products announced by US President Donald Trump, which exempts strategic minerals under which aluminium falls.
Muzi Manzi, CEO of the Aluminium Federation of South Africa (AFISA), on Thursday said while he was yet to assess the actual executive order, it appeared that aluminium was exempted, which was in line with the sector's confidence as the US had shortages of the mineral.
"If, as it appears, we have not been slapped with the additional tariffs, if anything, we have been exempted because the US has demand issues with aluminium," Manzi said.
"It is classified as a strategic mineral along with some other commodities. The only thing that could have an effect is if demand in that market lowered because of the inflationary impact of the new direction on tariffs."
South Africa predominantly exports primary aluminium and semi-fabricated products such as aluminium plates, sheets, and foil.
Manzi said aluminium was a globally traded commodity and there were established trading platforms such as the London Metal Exchange that determined the price of aluminium.
“As a country, we are highly competitive, as evidenced by our ability to export to the US and European global markets. The African Growth and Opportunity Act does improve our competitiveness, however, other producers are experiencing countervailing and anti-dumping duties in the US market,” Manzi said.
He said the prevailing South African Aluminium Industry Roadmap called for increased local beneficiation of the primary and semi-fabricated products exported.
“Any changes in the US may be the much-needed accelerant for the local industry with government support, to realise increased downstream processing of aluminium,” he said.
Gerhard Papenfus, CEO of the National Employers’ Association of South Africa (Neasa), said there were possibilities of affected South African companies being granted exemption but there were two levels to it.
"It is true that a delegation from Japan, Israel or elsewhere will be received differently from a South African delegation because of the politics but it is different on a commercial level," he said.
The South African Steel and Iron Institute (SAISI) said the US market was significant to a few players in the value-chain such as the Duferco Steel Processing (DSP) plant in Saldanha, which makes galvanised flat steel products as well as some stainless steel products produced by Columbus.
Last year alone DSP’s exposure was 77% or 106 000 tons out of the 137 000 tons exported to the US.
However, if the 25% import tariff applies to everyone the impact could be less seeing that the US is a net importer of around 20 million tons.
Donald MacKay, CEO of XA Global Trade Advisors, said Trump’s assertion that a “discounted reciprocal tariff” of 30% against South Africa was justified because of 60% tariffs charged on exports from the US was “a factual error”.
Mackay said South Africa’s tariff average on US goods was 7.5%. He said if Trump’s logic behind the implementation of new tariffs for imports was followed through, goods sent to the US from South Africa should be tariffed at 3.75%, not 30%.
He said, of the goods worth R153bn that South Africa exported to the US in 2024, about half were minerals “and about half of that is platinum”.
MacKay said the motherload of platinum was found in South Africa and without it, the US automotive market wouldn’t be able to function.
"It’s very easy to sign off on a tariff policy; much harder to build a factory. The US isn’t miraculously going to have the capacity to build all of these cars, such as Mercedes Benz and BMW units locally manufactured and exported to the US," he said.
BUSINESS REPORT
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