state of the stainless steel nation
wastewater infrastructure, food and beverage processing, mining, energy, transport, healthcare and architectural projects. However, its durability and low lifecycle cost create demand only when projects are specified correctly, funded and ultimately implemented. South Africa has no shortage of infrastructure plans. The more pressing question is how quickly these plans can move through project preparation, procurement and construction, and how much of the resulting demand will reach domestic manufacturers and fabricators. Production declines as imports rise Data presented by the South African Iron and Steel Institute (Saisi) to Parliament underlined the seriousness of the wider steel industry’s position. Annualised crude steel production was reportedly 8% lower in April 2026, while primary steel imports increased by 38% month on month and exports declined by 21%. Import penetration in long steel reached 27% during the first quarter, which Saisi described as crossing a structural threshold. The longer-term trend is equally concerning. South Africa produced more than nine-million tonnes of steel in 2005, but current output is estimated at less than half that level. Imports now account for about 36% of South African steel consumption, with China supplying approximately 73% of imported material. Government responded in May by raising duties on specified products, including certain flat- rolled products, bars, rods, tubes and pipes, from previous levels of between zero and 15% to a range of 10% to 30%. ITAC has also introduced safeguard duties intended to give domestic producers time to adjust to import pressure. The duties start at 52.34% in the first year, before declining to 37.34% and 22.34% over the following two years, with exemptions and rebate mechanisms for products that cannot be sourced locally. For local manufacturers, these interventions could restore some price discipline. However, protection must be carefully calibrated. If material is unavailable locally, or local
prices rise without corresponding improvements in service and competitiveness, downstream fabricators may be disadvantaged. Global steel protection intensifies South Africa’s response is taking place amid a worldwide shift towards more assertive industrial and trade policy. From July 2026, the European Union reduced tariff-free steel import volumes by 47% compared with 2024 levels and increased the duty on above-quota imports from 25% to 50%. It also introduced a “melt and pour” traceability requirement, linking the origin of steel to where it was first melted and cast rather than where it underwent limited subsequent processing. The UK similarly reduced its tariff-free steel quotas by 51%, with imports above those limits facing a 50% tariff. The UK government cited global overcapacity and the strategic importance of domestic steelmaking to critical infrastructure and defence. These measures may create further challenges for South African exporters while diverting displaced steel into less-protected markets. They also demonstrate that major economies increasingly regard domestic metals production as a strategic capability rather than simply another commodity market. Localisation must move beyond policy Parliament’s trade and industry committee has called for binding local procurement commitments, stronger enforcement and closer alignment between infrastructure spending and supplier development. Its recommendations include enforceable public procurement for domestically produced steel, targeted assistance for vulnerable subsectors, resolution of electricity pricing and freight logistics constraints, development finance and tax incentives for downstream manufacturers, and a rail reindustrialisation compact led by the Presidency. The committee also called for stronger action against illicit, underpriced and incorrectly declared imports.
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Issue 3 – 2026
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