As thousands of South Africans await ArcelorMittal South Africa’s (AMSA) decision on its Newcastle Works and Vanderbijlpark Works, the steel company warns it faces a challenging market. Meanwhile, AMSA is exploring options to ensure long-term sustainability, aiming to maintain operations in a competitive environment.
In its financial results for the six months ending 30 June 2025, AMSA reported that low market demand, along with rail and electricity disruptions—costing an extra R358 million—and increased import penetration, have pressured sales and margins.
Consequently, domestic sales volumes dropped by 10%, and exports fell by 13%. Additionally, long steel imports, mainly from Zimbabwe, rose sharply, adding strain to operations.
AMSA noted that major economies, including the European Union, United States, United Kingdom, Canada, India, and Brazil, have introduced measures in 2025 to protect their steel industries.
“The Company noted that several major economies, including the European Union, United States, United Kingdom, Canada, India, and Brazil, have implemented strong measures this year to defend their domestic steel sectors. These include new safeguard duties, anti-dumping measures, and tariff-rate quotas aimed at curbing import surges, particularly from China, and the preservation of their critical steelmaking capacity,” the company stated on Thursday morning. In this context, AMSA urged the South African government to act to support primary steel production as a national asset. “The Company is awaiting the outcome of multiple regulatory and policy processes, including the Department of Trade, Industry and Competition’s reviews of the scrap-based Preferential Pricing System (PPS), the steel tariff framework, and the NERSA decision on a petition for reconsideration of Eskom’s rejection of a negotiated electricity price,” the company stated.
Furthermore, AMSA is working with Transnet and the Competition Commission to tackle rail service costs and reliability, which hinder efficiency.
Looking ahead, the company remains focused on stabilising operations, supporting the Flats Business, and preparing for future investment and localisation. However, AMSA warned that its Longs Business depends on external support and policy outcomes, especially in reducing imports and securing cost-effective energy and logistics.
Specifically, the outlook for the second half of 2025 remains cautious, with domestic demand expected to stay low, despite some improvement in global steel sentiment. However, international prices for flat and long steel products show signs of rising.
Therefore, AMSA will focus on strengthening the Flats Business and increasing local volumes through export replacement and quality initiatives. Moreover, careful capital allocation, asset monetisation where appropriate, and ongoing stakeholder engagement will guide the company’s strategy.
Additionally, progress in talks with the Industrial Development Corporation (IDC) will influence AMSA’s next steps. Based on the IDC’s due diligence, the company will pursue strategies to improve profitability and strengthen its Balance Sheet.
Reflecting on these challenges, AMSA’s CEO, Kobus Verster, said, “We are committed to finding a solution that ensures the long-term sustainability of our business and the South African steel industry. We appreciate the government’s willingness to explore strategic alternatives and look forward to working together to find a mutually beneficial solution.”
In conclusion, as AMSA addresses these issues, its engagement with stakeholders and focus on operational stability and policy advocacy highlight its commitment to South Africa’s steel industry. By tackling imports, securing cost-effective inputs, and collaborating with government and partners, AMSA seeks to strengthen its position and support economic stability. The coming months will be crucial, as regulatory outcomes and strategic discussions will determine the sector’s future.
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Frequently Asked Questions (FAQs) regarding AMSA:
- What challenges is ArcelorMittal South Africa (AMSA) facing in 2025?
AMSA is navigating a difficult market, with low domestic demand, a 13% export decline, and a 10% drop in domestic sales for the six months ending 30 June 2025. Additionally, rail and electricity disruptions, costing R358 million, and rising long steel imports, mainly from Zimbabwe, have strained sales and margins. - Why is AMSA urging government action for the steel industry?
AMSA is pressing for government support to protect primary steel production as a national asset. Noting that global economies like the EU and US have introduced 2025 measures such as safeguard duties to curb imports, AMSA seeks similar policies to counter import pressures and ensure industry viability. - What policy outcomes is AMSA awaiting in 2025?
AMSA is monitoring the Department of Trade, Industry and Competition’s reviews of the scrap-based Preferential Pricing System and steel tariff framework. Furthermore, it awaits a NERSA decision on a petition to reconsider Eskom’s rejection of a negotiated electricity price, critical for cost management. - How is AMSA addressing rail and electricity disruptions?
AMSA is collaborating with Transnet and the Competition Commission to improve rail service reliability and costs, which impact efficiency. Simultaneously, it is addressing electricity expenses through its NERSA petition, aiming to secure cost-effective energy to support operations. - What are AMSA’s plans for the second half of 2025?
Despite a cautious outlook with low domestic demand, AMSA plans to strengthen its Flats Business and boost local volumes through export replacement and quality initiatives. Moreover, it will pursue careful capital allocation, asset monetisation, and stakeholder engagement, with progress in IDC talks shaping its strategy.
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One Response
It will be great if all parties come to the table and help there are so many families future at stake