Intermediate industrial products include basic chemicals and basic metal products which form key inputs to diversified manufactured products. Prices have in many instances risen at rates substantially in excess of producer and consumer inflation. These sectors have high concentration levels and/or are dominated by super dominant firms resulting in ineffective or no competition. The production of the intermediate industrial products are generally in highly capital and energy intensive processes, while the more diversified manufacturing activities are usually more labour intensive. While South Africa has a significant comparative advantages in key intermediate products such as steel, aluminium and polymer chemicals due to the low costs of the resource inputs, cheap energy and previous state support; uncompetitive pricing of these products means that the cheap production costs of the intermediate inputs are not passed on to more labour intensive downstream activities. Under these circumstances South Africa fails to develop the production of diversified tradable products (both for exports and in competition with imports). South Africa’s exports instead remain concentrated in basic products with low levels of beneficiation.