Manufacture and wholesale of cast iron and steel
South Africa was the 25th largest crude steel producer in the world in 2018 with an output of 6.3 million tonnes. Then South Africa exported 2.7 million tons of semi-finished steel and finished metal products worth 2.4 billion US dollars.
The country produced 5.4 million tons of pig iron, of which it exported 662.4 thousand tons worth $ 245.2 million.
Production of core iron and steel products increased 1.6 percent from early 2019, while sales of these products at current prices increased 9 percent over the same period.
High production costs, unstable power supply and low domestic demand continue to have a significant impact on the productivity of local producers and wholesalers of primary iron and steel.
Industry under threat
Since 2008/9, South Africa's local steel sector has been in decline, with prices, margins and profitability negatively impacted by oversupply, a large number of competitors, weak demand and imports of cheap steel.
Demand from the important construction sector, which consumes steel, has declined as the private and public sectors implement fewer projects. Consumption in the mining sector also declined.
The stainless steel industry is being impacted by cheaper imports from China, high labor costs and rising electricity prices.
The US $ 10 billion projected metallurgical complex in the Musina Mahado Special Economic Zone is expected to have serious consequences for the local industry.
Key players
There are 46 companies operating in the iron and steel sector in South Africa, including the four largest primary steel producers: ArcelorMittal, South Africa, Cape Gate, Columbus Stainless and Scaw Metals. Others include Coega Steels, which is doubling the plant's capacity, and Allied Steelrode, which commissioned a second leveling mechanism in response to the growing demand for stretched and flattened steel.
