By Johnathan Paoli
The Trade, Industry and Competition Portfolio Committee has been presented with a sobering account of the challenges facing South Africa’s steel and metal fabrication industry during a stakeholder engagement session in Parliament.
Chaired by Mzwandile Masina, the session followed a briefing early last month by the Trade, Industry and Competition Department and involved input from key industry associations including the SA Iron and Steel Institute (SAISI), the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) and others across the value chain such as recyclers, exporters and rail suppliers.
“Clearly, there is a need for a steel indaba to ensure that stakeholders, the DTIC and other relevant government departments and state-owned enterprises (SOEs) can develop short-term interventions to save the steel industry and for the industry to make inputs and proposals to the country’s industrial policy to address its long-term sustainability and contribution to the economy.
“However, the necessary immediate interventions needed to support the industry should be urgently implemented in light of the geopolitical changes,” Masina said.
Convened as part of the committee’s oversight function, the meeting assessed the implementation of the 2021 Steel and Metal Fabrication Master Plan (SMP), with stakeholders expressing widespread concern over the plan’s limited impact and calling for decisive, coordinated interventions.
While they acknowledged the importance of the SMP in halting the sector’s decline and laying a foundation for future growth, they reported minimal progress, particularly on the demand side.
SAISI noted that although the plan had led to an improvement in the quality of locally produced long and flat steel and reinvigorated standards enforcement via the National Regulator for Compulsory Specifications and the South African Bureau of Standards, the broader objectives remain unmet.
The steel sector continues to face steep declines in domestic demand, surging imports, particularly from China, which account for 73% of South Africa’s primary steel imports and a lack of strategic investment from government and SOEs.
In 2024, South Africa produced 4.4 million tonnes of crude steel, but domestic consumption reached just 4.4 million tonnes, with 1.5 million tonnes being imported and only 800,000 tonnes exported. Production and demand remain well below pre-pandemic levels.
Compounding these issues are high energy, labour and transport costs, poor infrastructure investment and the continued importation of steel for public projects, despite SMP’s localisation goals.
A consistent theme among those attending meeting was the fragmented implementation of the SMP.
Stakeholders criticised the disjointed approach between government, industry and SOEs.
The SMP steering committee’s composition was also flagged, with representatives drawn from individual companies rather than industry bodies, resulting in narrow, company-specific interests overshadowing broader strategic concerns.
SEIFSA argued that the SMP’s over 70 deliverables and 20 workstreams lacked focus, contributing to slow reform and stakeholder disillusionment.
It called for a streamlined strategic agreement between government and industry, centred around three focused workstreams – industrial policy, demand creation and financing.
These would target unlocking infrastructure projects, supporting downstream manufacturers and addressing the chronic undercapitalisation of the sector.
Metal recyclers raised concerns that the SMP favoured primary producers at the expense of the recycling industry.
The Metal Recyclers Association said it was deliberately excluded from policy consultations, while scrap metal export controls and the price preference system hurt waste pickers, dealers and recyclers.
The association said the SMP had effectively subsidised mini mills by R8.5 billion through arbitrage opportunities on scrap, encouraging overproduction of steel billets for export without export duties.
The Recycling Association of SA echoed this, stating that the PPS and related policies undermined recycling efforts and job creation, calling for their urgent revision or removal.
The International Steel Fabricators of Southern Africa emphasised that the SMP had failed to arrest the industry’s long-term decline.
It warned that downstream manufacturers, where most employment was concentrated, remained under severe pressure, and the sector’s current focus on upstream production was misaligned with market realities.
The focus for the next five years, the organisation stressed, should be survival rather than growth.
Other associations recommended the rapid imposition of definitive trade duties, import surveillance and the inclusion of countervailing measures in the African Continental Free Trade Agreement, particularly targeting competition from the Dinson steel mill in Zimbabwe.
In response to the stakeholders’ inputs, Masina highlighted the need to bring together stakeholders, government departments, SOEs and the department to develop short-term interventions to save the steel industry.
He emphasised the urgency of addressing the sector’s survival in light of geopolitical shifts and industrial policy failures.
The committee pledged to escalate the matter within Parliament and the executive for urgent redress.
INSIDE POLITICS