The importance of local steel production has been highlighted by rising freight logistics costs, supply disruptions brought on by the pandemic, and Russia’s invasion of Ukraine. In 2021, there was a shortage of steel in South Africa, raising prices and prompting some downstream businesses to ask for the removal of import duties so that they could increase imports while local producers were unable to meet demand. Since then, prices have gone down, and while demand has gone down, there is now a lot of stainless steel in South Africa.
Steel and Metal Masterplan
As many grades required by the mining, mining equipment, and automotive industries are not manufactured locally, a master plan signed in 2021 has identified overcapacity in the production of long steel products and a focus on local production of flat steel products.
Additionally, the plan sees the supply of renewable energy-related steel as an opportunity for the iron and steel industry. Manufacturers of primary steel products have agreed to contribute to a development fund in order to support the plan’s various projects.
Challenges
The slow implementation of the government’s infrastructure development program, unstable electricity supply, steeply rising raw material costs, logistics, low domestic economic growth, and unreliable rail transportation are obstacles for producers of basic iron and steel. Due to import duties and steel producers’ high prices, some downstream steel product manufacturers believe their products are not competitive in export markets.
Report Coverage
Information on the state and size of the industry, as well as influencing factors like input costs, infrastructure and transport challenges, major players, regulations, and government support, are included in this report, which focuses on the manufacture and wholesale of basic iron and steel in South Africa.