ArcelorMittal closure confirmed, but hope floats in steel market

The company's long steel operations, which produce fencing material, rail, rods and bars for the construction, mining and manufacturing sectors, will be fully wound down and placed into care and maintenance by the second quarter of 2025.

"The structural elements leading to the wind-down of the long steel business remain unaddressed despite extensive discussions," Amsa said in a company statement.

"We were unable to avoid what will be a significant negative impact on the economy."

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The steel giant blamed the closure on weak domestic demand, competition from local scrap metal recycling mini-mills, and imports from China.

Operations losses from the long steel business doubled to R1.1bn in 2024, contributing to a wider headline loss of R5.1bn, up from R1.89bn the previous year.

Industry facing multiple headwinds

The closure comes as the Steel and Engineering Industries Federation of Southern Africa (Seifsa) released its State of the Metals and Engineering Sector Report 2025, painting a concerning picture for the industry.

According to Seifsa COO Tafadzwa Chibanguza, the sector faces "a variety of headwinds both locally and globally" including heightened geopolitical tension, low economic growth, and slow implementation of necessary economic reforms.

Full-year estimates for 2024 show the sector's production declined by 1.4%, while employment increased by only 0.5% to 362,210 people.

Exports fell by 6.3% and imports decreased by 6.9%, with the sector's GDP expanding by just 1.1%.

"Where there was improvement in the numbers, it was marginal to negligible," Chibanguza noted.

Anti-dumping duties under scrutiny

Meanwhile, the National Employers' Association of South Africa (Neasa) has challenged the anti-dumping duties imposed on structural steel imports.

In November 2024, provisional duties of 52% and 9% were imposed on structural steel from China and Thailand respectively, despite the investigation into alleged dumping not being completed.

At a hearing before the International Trade Administration Commission of South Africa (ITAC) on 24 February, the association argued that anti-dumping duties should not be imposed without direct causal link between injury to local producers and alleged dumping.

Even if dumping was not taking place, the injury to Amsa would not disappear.

Neasa maintained that Amsa's difficulties stemmed from multiple factors beyond steel imports, including "competition from highly subsidised mini mills, generally weak economic growth in South Africa, increased logistics and energy costs, and the Preferential Pricing System for scrap metal."

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African markets offer hope

Despite the challenges, Seifsa pointed to African markets as a potential bright spot, accounting for 41% of the sector's exports.

The IMF has forecast growth of 4.1%-4.2% for Africa, outpacing other regions.

"Despite the challenges of intra-African trade, the continent still presents considerable opportunity for the sector," Chibanguza said, citing increasing private capital flows and a young demographic profile.

To place the sector on a sustainable growth path, Seifsa recommended three key initiatives: developing a comprehensive metals and engineering policy with bold ambitions, creating a demand-pooling structure to identify and prepare viable projects, and fast-tracking the public-private partnership framework being considered by the National Treasury.