South Africa’s stainless steel industry needs coordinated interventions across the value chain to address weak domestic demand, rising energy and logistics costs, global overcapacity and increasing import penetration, says the Department of Trade, Industry and Competition (dtic).

The dtic states the sector remains strategically important to South Africa’s manufacturing base, with opportunities for beneficiation, value addition, exports and job creation. It is supported by established production capacity, technical expertise and a downstream manufacturing base serving the mining, water, energy, rail, automotive, food processing, construction and capital equipment manufacturing sectors.

The dtic submits that South Africa’s significant chrome reserves and existing ferrochrome production capacity provide an opportunity to convert resources into higher-value stainless steel products, in line with government’s industrialisation agenda.

Government has supported the industry through industrial policy interventions, trade measures, localisation initiatives, investment facilitation and engagement with industry stakeholders. This work is being strengthened through the Steel Roadmap – a government-led initiative that is being developed with input from the steel industry and other stakeholders, as well as the stainless steel industry.

“Our priority is to strengthen the entire stainless steel value chain rather than focusing solely on primary production,” the dtic tells Engineering News.

This includes expanding downstream manufacturing and value addition, increasing localisation in strategic sectors, leveraging public procurement and designation, supporting exports and market diversification, and improving competitiveness through infrastructure and logistics upgrades.

The dtic also prioritises addressing unfair trade and illicit imports, as well as industrial decarbonisation and technology upgrading.

Therefore, it supports measures to address unfair trade and global distortions while maintaining the international competitiveness of downstream manufacturers. This work involves cooperation with the International Trade Administration Commission of South Afric, the South African Revenue Service and the broader industry through platforms such as the Downstream Steel Forum.

The engagements address customs fraud, under-declaration, circumvention practices and illicit imports, while tariff reviews, trade remedies and import surveillance measures are intended to strengthen the trade policy framework.

Localisation

The dtic says government continues to implement localisation measures through public procurement frameworks, designated sectors and supplier development initiatives to increase local production, stimulate investment, deepen supply chains and create sustainable industrial employment.

Africa is also a significant growth opportunity for South African manufacturers. The dtic expects investment in energy infrastructure, water systems, mining, industrialisation and transport infrastructure to drive demand for stainless steel products and engineered solutions across the continent.

The African Continental Free Trade Area creates further opportunities for regional value chain development and market access.

The country’s recent partnership with Afreximbank is intended to support this objective by expanding access to trade and industrial financing for South African companies seeking opportunities across African markets.

Meanwhile, changing international trade requirements are highlighting the importance of reducing carbon intensity to maintain market access.

The dtic says its response is guided by the country’s decarbonisation programmes, which are embedded in the Industrial Development Strategy, Integrated Resource Plan and climate change commitments,  which are aimed at advancing a low carbon economy and industrial competitiveness.

The dtic continues to engage with trading partners on environmental requirements, including the EU’s Carbon Border Adjustment Mechanism, while working with domestic and international partners through initiatives such as the Climate Investment Fund Industry Decarbonisation Programme.

Support is also being pursued for energy efficiency, renewable energy, cleaner production technologies and industrial upgrading, including opportunities linked to green steel.

Recycling and circularity are also becoming increasingly important to ensuring competitiveness, the dtic says.

Increased use of recycled stainless steel can reduce emissions, improve resource efficiency, strengthen supply security and lower production costs. The Steel Roadmap process recognises the criticality of scrap utilisation, recycling and circular economy principles.

The department says the stainless steel industry’s future depends on expanding value-added manufacturing, strengthening beneficiation and downstream production, growing exports, diversifying markets and advancing decarbonisation, supported by continued collaboration among government, industry, labour, development finance institutions and strategic partners.