https://newsletter.en.creamermedia.com
Africa|Export|Financial|Industrial|Manufacturing|Power|rail|Services|Steel|System|Manufacturing |Products
Africa|Export|Financial|Industrial|Manufacturing|Power|rail|Services|Steel|System|Manufacturing |Products
africa|export|financial|industrial|manufacturing|power|rail|services|steel|system|manufacturing-industry-term|products

Decision time

5th September 2025

By: Terence Creamer

Creamer Media Editor

     

Font size: - +

Developments in the South African steel industry offer a glimpse into the pressures being faced by the manufacturing sector as a whole, and the likely industrial and trade policy responses to those pressures.

The first thing to recognise is that there is no such thing as a homogenous ‘steel industry’. Yes, the macro themes of oversupply, import competition, and deteriorating power and rail utility services and costs are common across the sector. However, a company’s assessment of what policy response is appropriate depends entirely on that firm’s positioning within the sector.

Large upstream producers believe the answer lies in tariff protection and import substitution. Downstream fabricators want their steel inputs to be as cheap as possible and, thus, prefer protection to be applied on intermediary or final products rather than on inputs. Smaller firms want cheap inputs and are desperate for consistent market demand, which is highly growth dependent, and are thus highly sceptical of tariffs and duties that could dampen growth.

Therefore, it is impossible for the policymaker to satisfy the ‘steel industry’ as a whole. What it has to do is weigh up the trade-offs and intervene in a way that ensures the net growth, employment and industrialisation outcomes are positive.

In the South African context, those trade-offs are now front and centre for the Department of Trade, Industry and Competition (dtic) and the International Trade Administration Commission of South Africa (Itac) as they prepare to make industrial and trade policy decisions that will have far-reaching consequences.

On the industrial policy front, the dtic will need to make a call within weeks about the future of ArcelorMittal South Africa’s (AMSA’s) Newcastle mill, in KwaZulu-Natal. Should it be saved? Should the financial exposure of the Industrial Development Corporation to the mill be increased? Should the price preference system for scrap and the associated export restrictions, which AMSA blames for Newcastle’s lack of competitiveness relative to scrap-based producers, be overhauled or abandoned?

Then there is the issue of import substitution. What should the regulations look like now that the Public Procurement Act is in place? Which products should be stipulated for local supply? Are the local-content designations that were agreed for the steel sector specifically still relevant? What price premium should government accept to drive industrial development?

On the trade policy front, meanwhile, Itac has some big decisions ahead. Should it proceed in recommending the implementation of the sweeping tariff hikes outlined in a preliminary determination following a review of the steel tariff structure? Should the rebate system be expanded to provide something of a relief valve in cases where domestic industry cannot supply? Does Itac have capacity to administer more permits? Should the protection emphasis be weighted towards the upstream or the downstream? Should the issuance of import permits be contingent on firms meeting other social objectives of government? Should more consultations be held?

South Africa’s future industrial landscape truly now rests on the answers to these pressing questions.

Edited by Creamer Media Reporter

Comments

Latest Multimedia

Photo of Martin Creamer
On-The-Air (05/09/2025)
5th September 2025 By: Martin Creamer

Showroom

Actom
Actom

Your one-stop global energy-solution partner

VISIT SHOWROOM 
Condra Cranes
Condra Cranes

ISO-certified Condra manufactures overhead cranes, portal cranes, cantilever cranes and crane components: hoists, drives, end-carriages, brakes and...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Magazine round up | 05 September 2025
Magazine round up | 05 September 2025
5th September 2025

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







301

sq:0.038 1.13s - 168pq - 2rq
Subscribe Now