There is a danger that the closure of Saldanha Steel will pressure the government into granting additional tariff protection to its owner, ArcelorMittal SA (Amsa), further harming downstream producers while only delaying the primary steel producer’s demise.

Last week, Amsa announced that it would wind up its Saldanha plant due to high raw material costs, unaffordable electricity, port and rail tariffs, and a collapse in domestic steel consumption. The latter is just 70% of what it was in 2008.

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